Check out this interesting piece from our friend Simon Turner – Great insight… CF
Dear Startup Founders, I regret to Inform you that there is no magic money tree.
Neither does it fall from the sky
This may sound like a ridiculous, patronising, and cynical statement, but not a week goes by when I’m not asked by some aspiring founders — typically yet to launch — “when will I get funding?”.
The reality and truth is: for many(/most), you won’t.
Investors won’t flock simply because you think you have a good idea, and perhaps a little traction. It’s an extremely competitive landscape, with every entrepreneur fighting for attention, trying to cut through the noise, and get their heads above the crowd to get noticed.
This can’t be understated nor underestimated: only the best, most resilient, and most focused will shine.
And this is priceless advice for those who are serious, as if you act like you’ll never get funding, then you’ll focus on solving the burning problem, grow your business, bring in revenue, and make money.
The reality also, is that this question usually comes from those who are not serious. The typical persona with this thought process — in my experience — has yet to dip their toe in the startup world but sees it as a fast-track to getting rich.
And this, for me, is a guaranteed path to failure.
For those whose burning priority is to get rich, rather than to be the commander of their own destiny and solve a problem they’ve identified, they are usually the first to fail (if they even start in the first place).
Too many people see entrepreneurship as the quick fix for everything, including getting mind-boggling wealth with the great idea they had a few weeks ago. Whereas, if you speak to the majority of entrepreneurs (those who have experienced great success, as well as those who are still ploughing away to reach great heights), they’ll tell you that entrepreneurship can be an extremely lonely, isolating, exhausting journey where you constantly second guess yourself, see more failures (read: lessons) than instant successes, need an inordinate amount of patience and resilience, and frequently wonder “did I make the right decision?”
I’m certainly not going to try to speak for all entrepreneurs, but I’m sure very few who have gone full-in — invested everything in terms of time, energy, and finances — will say that they did it to get rich.
Wealth is a nice by-product and outcome for sure, but it can’t be the motivating factor to launch.
The purpose that gets you to launch, and keeps you going through the tough times has to be something with far greater, deeper substance.
In any case, seeking investment and funding can be a full-time job on its own. Thus, if your business isn’t flourishing, seeking funding means you’re taking your eye of the ball and not putting all your energy into the business itself. For early-stage founders, you can’t do both. If you’re not willing to put in the blood, sweat and tears required to build your business, focusing on funding is not worth the effort either.
And for those entrepreneurs whose startups do get some traction and start to see some revenue, this should the barest minimum for even thinking about investment.
Unless you have a secret sauce, a compelling “fear of missing out” message for investors, clear momentum, revenue (I’ll say a ballpark of $100k but every investor is different), and kick ass leadership, you need to wait until you do have most of these. When you’ve achieved these, you’ve put yourself in the best position for investors to come and knock on your door, rather than you begging with a bowl at theirs.
Then, if and when this happens, you’ll be in a far better position to negotiate terms with you and your business’s future not solely dependent on someone else’s money.
So, my message for those looking to become an entrepreneur, or those in the early stages of building something: if your first question is “when will I get funding”, my answer is that you have the wrong priorities and you should look at other “get rich quick” schemes, keep doing the job you’re doing, or if you do seriously want to enter the world of entrepreneurship then get your priorities in order, be a sponge and absorb as much learning as you can, brace yourself for the rough ride, and then dive in for the right reasons, with purpose.
Ultimately, if you want success — and this newsflash certainly isn’t specific to entrepreneurship — you have to put in the hard work. Period.
To read more about me, my work, and my purpose, find our more here