Failing to raise money as a Startup.
A founder asked me this a few weeks ago: What happens if I fail to raise money for my startup?
This founder is building a huge sustainable fashion startup and the traction has been great. Their plan is to now scale and grow and naturally, the first thing in the mind of every founder is to think about startup funding. You raise money and you grow. Right? Well, yes and NO!
As a founder keep the following things in mind when you feel the next natural step is to raise money:
1. Not every idea is a startup! You can be a business and that is ok too. A startup does one thing REALLY well and that is the only thing they want to be known and grown for. Ask yourself, if you fall under that category.
2. Not every startup will raise money so what is the next step? Work on building the best customer experience! Revenue is still the hottest piece of capital. All earnings and no Equity! More and more startups are looking at getting revenue early on.
3. Alternate funding models. We have a lecture by the Amazing Attorney Jenny Kassan from The Kassan Group on this. Go and binge it: https://newfounderschool.com/courses/alternate-funding-models-for-startups-with-jenny-kassan/
4. Don’t do it as a bucket list goal, meaning, you will be a success if you raise money. tons of startups shut down after raising money. Fundraising is not a milestone, it is a tool that augments the growth of the startup. Remember that.
5. Want to fundraise in 6 months, start working on your investor updates and networking. The basic template of that update email should have the following 3 things:
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