Startups are risky. Many fail. Many do not raise capital and many do not survive. There is a lot of hype in the startup world and people tend to think that raising money is the be all and end all for all startups. But why should it be?
Sure, you can practice the spiel about the team and the progress to date, when it comes to investors, but ultimately, is it right to take this money?
As soon as you take money in, you are risking other people’s cash.
Investments ramp everything up a gear. For one, investors will expect to be kept informed of your progress. Be prepared for criticism and feedback if things are not looking good.
Angel investors may be prepared to write off the cash, but they might become your friend along the way. You don’t want to let them down.
Ultimately, investors want to see your company grow. If you cannot show this then there is pressure. You may feel that you have done a bad job of leading the ship.
You may feel a whole lot of pressure that wouldn’t be there if you didn’t take the cash.
Funding allows you to do things that you wouldn’t have been able to do otherwise.
For that, it is a great mechanism to grow your business to new heights. You should really think about the things that happen when you do take on funding though, and question whether you really need it.
This is an excerpt from Tech in Asia. You can read the full article here.