Lessons from my Entrepreneurial Journey #5
“We like the team, the market space and the traction. However, you are too early for us”. This is one of the most common ways angels/investors politely decline the next step.
The other most used phrases are
– “Let’s connect 6 months from now..”
– “Keep me posted on your progress.. “
@Entrepreneur: Get ready to hear the above multiple times in your journey. You have focused on the 3 important things, (Team, Market Size, traction). You believe you have got everything right. Still you are not able to raise funds.
It’s a Catch-22 situation. Angels expect traction to fund. If you already had that traction, you would not need their funds.
This is a very tough phase.
– Day in & day out you read articles of some startup or other raising funds sometimes even without a product and you wonder what’s wrong with you.
– You register in portals that promise you connection with investors. Some of them do not even bother to reply to your mails.
– You attend events by angels that talk of what angels look for in startup. None of these mantras seems to work for you ;(
– You are continually asked by friends/family. “Have you raised funds?” as though raising funds is a validation of your success.
– You meet wrong angels, who waste your time, with no serious intent to invest or knowledge of the ecosystem.
– You meet some angel(s) who want a large stake in your company for a very small investment.
What to do?
– Learn from each of these angel/investor meetings. Sometimes there are some good ideas that they might provide.
– If there are ideas to pivot, explore and validate.
– Improve your pitch.
During my low days, I took solace in the popular struggling entrepreneur quote “Raising funds does not guarantee success”.
Realize that there are somethings just not in your control. Getting funded is one of them. Sometimes, not being funded very early on is actually a good thing and can be a blessing in disguise.
Focus on the things you have control on. Top 3 in my list:
– Costs: Continuously explore alternatives to keep costs low to expand your runway.
– Revenues: Continually change your sales strategies to check what works and what doesn’t.
– Team: Build a strong performance culture.
A combination of the above should help your startup differentiate from the rest over a period of time.
When I look back, I have no regrets that we were not successful in raising funds early. Just at close to 3 year mark, we raised a small seed round.
As entrepreneurs, our endeavor should be to build a self-funded company that sustains with customer revenues & very little investments.
We should be in a position that someday we can tell an investor “You are too late for us!”
This is the fifth part of a series by the author. Find the previous post here.
[About the Author: Shashi Bhushan is the Founder & CEO of HealthMacro Technologies. He plunged into entrepreneurship to explore his dream of building something that touches people’s lives. HealthMacro were TiE’s Anthah Prerana 2013 winners. He can be followed on twitter at @ShashiBhushanHR]