Answer by Larry Easto: Cash positive startup seeks direction. We are at a crossroads of continued self-funding, getting a small investment for growth or acquisition?

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Cash positive startup seeks direction. We are at a crossroads of continued self-funding, getting a small investment for growth or acquisition?

We have a small insurance software startup; making money ($40k per month); positive cash flow; money in bank ($250k). We make insured payment portals, IVR's, and apps that work as a platform for auto insurance companies. We have tried in the past to get our marketing team up and selling and we have failed. We ended up spending about $100k with little results other than goodwill. We have some cash to spend but feel that we cant take another risk on a losing team. We could also REALLY use our funds on our devs and make an impact on our products. We are stuck at a crossroads of self-funding, seeking funding (have no clue from whom) and finding a larger company to be acquired by (we have a few that have been sniffing). With a good sales staff getting our products to middle tier auto insurance companies we feel that we can grow fairly quickly. With a small ($2 million) investment we can grow much faster with more products. Thoughts?

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Larry Easto Best-Selling Writer ♦ Marketing Coach/Consultant

Interesting scenario. I offer two approaches for your consideration.

APPROACH #1: What does your strategic plan tell you is the right decision to make? If you don't have a strategic plan, perhaps the time is right to put some time and effort into preparing one. The magic of strategic planning is not so much about the finished document as it is about the decision-making process that leads to the plan.

This planning can be done either on a do-it-yourself basis or with the assistance of a third party facilitator. Having been in both roles, I'd be happy to discuss the relative advantages and disadvantages of each with you.

APPROACH #: 2 What decision will best lead to the achievement of your goals? Only you know the answer to that question. Again, it's a choice between DIY and third party facilitator, each of which has its own relative advantages and disadvantages.

Sorry for answering your question with more questions. Sometimes that's the only way to go. :)

Answered 9 years ago