Funding doesn't make a lot of sense to first time Founders. In our minds, we think, "Hey, investors want to make money, so if my startup can make money, who cares how big it gets?"
Unfortunately, that thinking overlooks one big fact: that for every one investor check out there, there are hundreds of startups competing for it.
In order to understand how investors look at one deal versus another, we first have to understand how investors look at deals in the first place.
There's no absolute rule here, but investor behavior generally follows a consistent trend. Most "professional" investors (people who invest consistently) gravitate toward investments that can yield an exponential return, such as an IPO.
While the term “product-market fit” gets thrown around a lot in the startup world, it’s not always very well understood. In fact, we can’t even agree on who created it! Some people say that the concept of product-market fit was first developed and named by entrepreneur and investor Andy Rachleff. Others give credit to famed investor Marc Andreessen, who at the very least popularized term product-market fit when he wrote about in a 2007 blog post. He said, “Product-market fit means being in a good market with a product that can satisfy that market.”
In other words: You could have an amazing, sophisticated, well-thought out idea — and people just don’t get it. (Think: That first focus group for Pied Piper on HBO’s ...
The investor pitch. It's feared. It's desired. It's terrifying.
But don't worry: We've got you covered. Here's everything you need to know about that all-important investor pitch.
Invisu.me Co-Founder and CEO Donna Griffit is a master pitcher who has helped countless founders distill their pitch down to exactly what they need — and nothing they don’t. She had the opportunity to sit in on a private pitching event where a delegation of startups had the opportunity give a five minute pitch and receive direct feedback from a group of top-tier Silicon Valley VC’s. (So top tier that she can’t even say who was there but, trust us, you will want to memorize this section before your next pitch.)
Here’s what ...
There's a weird discussion around Founder compensation, especially when the number is a big fat zero. We read about famous Founders from Google, Facebook, and Tesla taking $1 salaries, while earning millions in stock.
For early-stage Founders, we often can't get paid (so it's not much of choice!) but there's also this presumption that if we're forgoing personal compensation to roll all the profits back into the company, then we must be really committed.
There's no argument out there that Founders shouldn't be paid, so taking compensation to zero is just a silly move.
The only time Founders or execs get the stink eye is when they take inordinate salaries compared to the rest of the staff or relative to the stage of the ...
Somehow the startup world has convinced people to work for "free" on a regular basis, with the theoretical benefit of some big payout on equity later.
The truth is, those bets rarely work and once the pixie dust of the new startup wears off, what's left is a bunch of frustrated employees who can't pay their bills.
Although we have little to no money to pay today, we should always try to incorporate some level of cash compensation, even if it's incredibly small, to help offset the cost of life that our team is going to inevitably face.
When our team is more focused on going broke than contributing, we're not really doing anyone a favor!
Compensation doesn't have to be "all or nothing."
Just because someone mak...
When we talk about celebrating startup wins, it's not about a big funding round. It's the fact that we just made payroll again.
Along the way, we forget to celebrate those tiny wins. Instead, we get distracted by the day-to-day problems, the emotional roller coaster, and the grind that is startup life.
Every possible positive step.
We just shipped a feature. We increased site traffic by 10% over last month. Our last customer just sent us a glowing review to the team. Every last one.
Each of those victories compounds into the overall goal. When we overlook them, or worse, fail to recognize them within our team, we lose out on the opportunity to build positive morale and momentum.
In a startup, morale...
“Sometimes your spidey sense is like, ‘I don’t know if either one of these are right,’ but you have to go somewhere. Spinning your wheels, being in neutral? That’s bad.”
When you hear Founders out in the media talking about their product, most of what you hear them talk about is all the things that went right: the hypotheses that were confirmed, the “ahah” moments where all the pieces fell into place.
What you don’t hear most Founders talking about: all the things they didn’t know – the times a big bet didn’t pay off, the times when what you thought was true turned out not to be the case, the times when the market turned on a dime and suddenly everything you...
We've been working around the clock on our side hustle with the dream that one day it'll be our full-time gig.
But now that we're getting some traction, the real question is, when do we go all in?
There will never be a more equitable investor than our current paycheck.
Full funding, no pitch process, and market compensation from Day One.
Compare that to when we try to actually raise money in a grueling pitch process, spend months with no income, and have to work for half of what we made last year.
While our current investor (our paycheck) has a lot of hours and distractions, it has some really important benefits: it's predictable, it's consistent, and if shit hits the fan, we just focus on that....
One of the most common questions we get asked is, "Should I raise capital for my business?" _What they’re really asking is, “Can you tell me how to raise money and where to find it?”_
And our stock answer is simply "No".
That tends to mess with people — because they typically aren’t expecting pushback. But the reality is that there are actually very few reasons that a startup absolutely has to raise capital. Every startup could use it. But does every startup absolutely have to raise?
Having answered this question about a billion times, it seemed like the right time to list what the decision tree for startup Founders should be when determining they must raise capital so we can distinguish the difference between "I need it" and "I have...
Pre–seed. Seed. Series A. Series B. Growth capital. Term sheets. Valuations. Cap Tables. Convertible notes. Market opportunity. Venture Capital. Angel investment. Equity Crowdfunding. Family offices.
While the learning curve is steep, getting funding is about more than just an understanding of terms, it’s about the art of relationships. For female founders, the funding landscape has been less than friendly. According to Crunchbase, the number of female-founded, venture backed companies has plateaued at 17% since 2012. Is venture the only way to go? Certainly not. There are a diversity of funding sources founders can tap into. Crowdfunding, for example, is the only type of funding where women outperform men.The SheWorx100 Summi...