Anti fund raising advice

Out of all the meeting requests that I receive from founders outside of morpheus gang, a large percentage of the founders want advice & help on fund raising, intros to VCs / angels etc

In most such conversations I end up repeating what I have already shared in other similar conversations. I figured it would be a good time-saver to just write a post on this topic, some folks would hopefully read it before sending me the request & for others, I can forward the post.

What I end up giving is not “Fund raising advice” but “Anti fund raising advice”. I always start off by saying, “I am not sure I am a good person to talk to for advice on fund raising”. I say this because one of the core beliefs that we preach, to startups at TM, is to completely de-focus fund raising from the process of building a business.  None of the great businesses were built in such a way, where the founders first focused on raising funds & after they completed fund raising, they came back to focus on building the business.

Instead the right way is to just keep building the business in best possible manner with the resources available to you. Just keep moving, keep hiting the milestones, get the prototype out, launch V 1.0 / 2.0 , get initial customers, collect feedback, keep itrating, use organic channels to acquire customers, be super capital efficient, get coverage, start making money, become profitable, understand your numbers, understand the industry.  Do all this with a belief that you will never raise money, but will still build the best company even in this space – if it takes time, hard work & lot of effort, so be it. Customers are the best & most loyal investors. As long as you keep adding value to their lives, they wont leave you.

The magic here is that once you gain the ‘supreme self belief’ that you can & you will do this without help or money from the money guys, the money guys automatically start becoming interested. You start receiving geninune incoming interest, where the conversations are much more constructive & friendly, You do not need to make long presentations, imaginary business plans or 5 year financial projections. Your business has traction, you have created real value & good investors can see that. Things move fast, negotiations are easy, you can continue your focus on your business & the fund raising activity just happens on the side. If at all you are dealing with someone who is acting too tough to your liking or taking too much time, you have the power to walk away from the deal, which is the supreme power in any negotiation. And you can do that because you are not dependent, you do not need their money to build or continue your business. The equation is now reversed – they need you more than you need them.

Good investors & external capital can play an important role in the growth & success of a company but only if it comes at the right time, in the right manner, at the right terms & from the right source.

So as I am fond of saying: “Stop all fund raising activties, do not look for money. Build a great business & the money will find you.”

Here are couple of detailed articles I have written on this topic: