Author: Han Jin / Source: Forbes
Every startup founder/CEO is constantly thinking about money. Do we have enough?
Should I raise more? Where will it allow me to go with my business? In the startup world raising a significant round of funding is often considered a huge achievement and often the number one priority for anyone who runs a company. It seems that success is often measured by how much investment you have been able to bring into your startup, and if you do not have a big investment you can be treated like a failure even if you are making a profit. You often get questions such as “Is everything ok?,” “Is your business not doing too well?,” or “Are you struggling to scale?.” From my observation, the startups with small investments and which are able to make money and successfully scale – even making a profit – can be viewed unfavorably when compared to bigger startups which have raised hundreds of millions of dollars and are selling large portions of their businesses to investors. Examples such as AirBnB or Uber which have taken in $4.4 B (AirBnB) or $21.7 B (Uber) have become role models for every aspiring entrepreneur, but is investment really the right metric to define startup success?It is most important to realize that it really differs from startup to startup as every founder and company has a different path.
However one thing is common for all – a huge amount of effort is required for both fundraising or generating revenue – which can divert the founder’s time and attention from the work the startup really demands. Here are a few lessons I have learned from both sides of the fence while raising money and making money.#1 Lesson: Raising or Making Money Is A Full-time Commitment
It absolutely takes a lot of time to raise money. Setting up meetings, preparing, driving to the meetings and following up on questions and responses can take easily hours out of any day. If any founder is under the impression that you can either fundraise OR run your business on the side while you concentrate on the other tasks, you will quickly find out that it is impossible to do. That is why I realized early that the amount of time you spent on fundraising is the actual metric to measure your success, because the faster you close a round, the earlier you can get back to work and make money. Therefore you must commit to one or the other and put all of your effort, time and intelligence into doing it.
One thing to keep in mind, however, is that if you focus on making money, then that will often lead you…
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