To Raise Money or Not Raise Money – Bite-Sized Business Advice


I have been giving more and more advice to entrepreneurs lately telling them not to raise money. Focus on building a good business, profitably, and then think about raising money once you prove the business model. 9/10 times this is the best way to do it. Too often you hear about these huge success stories on an entrepreneur that got millions. The stories often go much deeper than that, the entrepreneur certainly sees none of that at first, and most of the time, by the time the business is a success, you own 5% or less and have a bunch of investors on your back. And at this point, you are basically working for someone again, which is the exact opposite reason that you got in business for yourself in the first place.

If you have faith in your idea, and you need some runway cash, then raise money via debt. This will allow you to pay it back and keep other people out of your business once you do so.

Make sure that you REALLY know what you are going to do with the money, and that you absolutely need to have it. If you can build a good business first and then raise money, you will usually end up still owning the majority. As well, you will be in a better position to know how to use the money. Often times, raising money too quickly is squandered away on what ends up being very unnecessary.