Should you try to raise money for your new startup business?

Having raised money for several startup businesses this is a question I get asked all the time. While I don't claim to be an expert on the subject matter I can certainly speak to my experience. I also need to say that this is an exhaustive topic that takes far more than a simple blog post to cover. That being the case, I'd like to address just a small piece of the puzzle today, what I call the TWO ENTREPRENEURIAL PRESSURES.


Pressure 1: Customers
As an entrepreneur you will always be dealing with customer pressure. And as the business founder you will never be far from the front lines. I've heard a number of business owners refer to the feeling of always being "on call" for their customers on nights, weekends and even during vacations. Been there, done that. Like it or not, that's real, unavoidable pressure for every entrepreneur.

Pressure 2: Investors
While Pressure 1 is unavoidable (or you'll quickly find yourself out of business), Pressure 2 is optional. I don't want to spend time here today discussing how to decide whether or not you need to take on an investment for your business, but I do want to point out that once you go down that road you have opened up pressure from a whole new dimension... Investors. It turns out that investors don't invest in your business because they like your idea or like you as an entrepreneur, although those are preliminary requirements. Investors give you money because they like money and believe you can make them MORE! If you meet or exceed your business plan you'll hear little to nothing from most experienced investors as they'll be confortable that you're hitting the goals you proposed on the front end which means they're on track for the returns they expected when they made the investment. However, when things don't go according to plan, an lets face it - they rarely do, your investors are going to demand (and deserve) an explanation and demand (and deserve) a revised plan and demand (and deserve) up-to-the-minute play-by-play until you get back on track.


This post is not meant to suggest that taking on an investment in your business is either good or bad. As a matter of fact my personal experience is that the right investor brings far more than money to the table and far more good than bad to the table (see this post for details). The main point I'd like to make here is that as you consider taking on an investment for your business keep in mind that the pressure you now feel from you CUSTOMERS will potentially now be bookended by new pressure you will feel from INVESTORS. Many entrepreneurs start businesses because they believe they can build products and provide services better than anyone else in the market and don't need anyone pressure from anyone to tell then how to do it right. When you start "working" for an INVESTOR you potentially compromise that ideal scenario. 

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