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Questions to Ask Yourself Before Raising Money
- tptacek 16y agoA simpler, more important question you should probably answer first: If you are completely and utterly unable to raise enough external funding for your current product concept to become viable, how will you modify your go-to-market plan or your product to make your business viable? Put differently: In the likely event that you fail to raise, how will you bootstrap? Two reasons: First, towards the end of this list, the author mentions "what's your BATNA". Your BATNA is crucial; it's probably 100% of your negotiating leverage. For a first-time entrepreneur, getting funded without any significant leverage is like winning the lottery: it does happen... but. So, you'll have better luck raising if you have a real plan B. You'll be harder to jerk around (VC in particular will absolutely jerk you around). You'll be better able to allocate your efforts between real opportunities and product/market development. Second, you are probably going to fail at raising external money. Nothing personal. Most first-timers are probably going to fail at raising external money.
- eladgil 16y agoGreat point. I think this is a broader question - what are all the ways you can fund the business? Can you have customers pay for development? Can you file for a government grant? *Can you take out a loan? In many cases, one of these routes may be superior then raising external money to begin with...