Sooner or later, as an entrepreneur, you’re going to reach a crossroad. You’re going to reach a point where you choose whether you want to maintain ownership of your business, or whether you want to take on outside investment. This is a difficult moment. It’s going to be tough. You’re going to second guess everything.
This is a difficult moment. It’s going to be tough. You’re going to second guess everything.
I make no secret that I believe in looking for profitability instead of chasing funding or investment. I’ve always felt that pursuing seed rounds when you could be working on building a product, selling it to people and optimising is a waste of energy.
However, I can also admit that there are going to be a lot of cases where my advice is wrong. There are some start-ups who might require large scale investment in order to achieve any kind of traction or success.
Typically, these are going to be platforms or services that rely heavily on user acquisition in order for their business model to function. Then again, there will always be success stories of founders who ran such companies to profitability without giving up a single Point or taking on a cent.
For you, taking on funding might be the best possible path for your company. Or it might not.
But you have no way of knowing. No matter how many books, blog posts or tweet-storms you read, you can’t know that choosing to take on or not take on funding is the right path. That’s just impossible. You’re not a fucking soothsayer.
The only way forward is to weigh up the information that you have, conduct your own analysis, seek some quality advice and decide to take whatever path looks the best for you and your company.
If you’re an entrepreneur who maintains a detailed and serious overview of her company or business, and you understand every single process and part of the works, you’re going to be in the best possible position to make that choice. Being hands-on and being as knowledgable as you possibly can (without micromanaging) is the best way to make any decision about your company – but even more so when you’re considering its financial and dependent future.
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Long before you get to the point where you need to make a choice about what path to pursue, you should take stock of your business. Seriously take stock. Research it. Bring someone in from way outside the company to help you, hire an auditor, find a mentor. Talk to your accountant. Find out everything you need to make an informed decision.
Then take that risk, make a call, and live with it.
When it comes down to it, you have to realise that objectively speaking, when it comes to staying privately owned or taking on investment there’s no right way forward. But in retrospect, when you stay up all night analysing your decisions, there will be a wrong way.
A wrong way that can only be apparent in hindsight. It might be the way you chose, or it might not.
Choosing to found a start-up in the first place was a leap of faith. You know it was. You did your research, learned as much as you could, and then made a call. That kind of courage is what you’re always going to need going forward, particularly when you’re at the funding crossroad.
Remember this quote:
If you’re not a risk-taker, you should get the hell out of business. – Ray Kroc, founder of Maccas.