Young and emerging companies need fuel. Let’s agree that you and your team are passionate and loaded with adrenalin, so we’re not talking about that kind of fuel. We’re talking cash. How are you going to do it? Are you the type that wants to get it over with, raise goo-gobs of cash, sell a ton of your equity? Hope not. That short-changes your company, perhaps increasing avoidable risks as well.
As your company evolves, you are iterating on many fronts. Those individual decisions may make great sense on their own. However, when you go through the exercise of building what you hope is a cogent argument for a potential investor, this will challenge your overall strategy and you’ll uncover weaknesses. If you don’t, your potential investors will. And this feedback will strengthen your company right along with your iterating. If you’re hearing this right, you have an Advisory Board available to you whenever you are fundraising. Powerful opportunity, and not a distraction, this is a necessary component of your risk mitigation and strengthening the performance of your company.
In 2009, as we were traveling through a few of Sand Hill’s finest VCs, we came across a stoic, probably Eastern European analyst that coldly entered the room. The Brand we were building was leveraging marketing more than any discoveries of technological genius. In hindsight, it may have been smart to stand up right then and there and say, ‘No thank you, it’s clear we are not a good fit.” We stayed, and watched him cross his arms while slouching and holding a bitter look on his face. Even in this circumstance, we learned a lot about our company. After we unfurled the rosy powerpoint, this crazy-eyed guy helped us dig into the granularity of our defensible IP. What would it have cost us in cash or equity to get this kind of critical thinking had we relied on Comp’d Consultants or an Advisory Board? This was brilliant, and free advice. He didn’t give a rip about the company, nor the investment. But he did care enough to rip our presentation to shreds. If your ego can take it, all investor pitches help make you, your team and your company stronger. Kaizen is the term that means continuous improvement. Maybe we need a term like ‘Cashzen’ and be in a constant state of fundraising.
Build Well.