When aspiring entrepreneurs ask me when is the right time to raise money, my answer always is, “Bootstrap as long as you can, until the lack of capital slows down your growth.”
Once you start the money hunt, the amount of time you can spend building your business goes down significantly. Especially if you are trying to raise VC funding, to do it successfully is nearly a full-time job. So while you are doing that, who is focused on building a viable business?
Seth Godin just posted an insightful (as always) blog post where he challenges that getting funded is not the same as succeeding. He says:
The goal isn’t to get money from a VC, just as the goal isn’t to get into Harvard. Those are stepping stones, filters that some successful people have made their way through.
…
I don’t care so much how much money you raised, or who you raised it from. I care a lot about who your customers are and why (or if) they’re happy.
Robin Wauters of TechCrunch agrees and states:
Godin’s words have made me wonder whether patting people on the back when they close their funding rounds is actually the right thing to do.
Maybe we should be encouraging them to genuinely try to change the world for good with the money they’ve just raised instead, and remind them that VC is indeed only one of many stepping stones they’ll need in order to make it to where they want to go.
I agree with both of them. The measure of success is not in how much money you raise, and from whom, but rather if you are reaching the goals you’ve set for your business itself.
(The featured photo is from flickr.)
