When did you first seek outside investment?

Can you provide anecdotes about when you first decided to seek outside investment and why? I know every company is different with many different variables but trying to get a better understanding from first hand perspectives.

Have you ever sought outside funding for your business?
  1. Yes
  2. No
  3. It's complicated
  1. 2

    Yes, but it's complicated.

    Startup A: Won a competition and got capital to build the product. It was enough to build it and more. The problem was that it was supposed to be coming with 2 corporate clients who spec'd out the competition. So we built it and it was a great product. The problem? People who spec'd it never really thought about it. I then spent more money to try to find who is it for and eventually abandoned it because it took all the time and money from my main business that was bringing food on the table. Lesson learnt: Money does not fix everything. I tried to raise proper investment but it has proven very hard for a product that needed a large audience/community to build first. At least in London, the question was "Where's the revenue?"

    Startup B: Took onboard an angel investor who had little understanding of tech, was risk avers and overpromised/estimated own network (got brain-raped by one of their contacts that were supposed to buy our tech! like in one of the episodes of Silicon Valley :)) bad combination of traits.

    1. 1

      Wow - really interesting stories. Thank you so much for sharing. I think the moral is to go as far along as you can without raising money. And sometimes this is likely further than you even realize.

  2. 1

    It really depends on a variety of factors why, to stay afloat, develop, expand accquire..etc

    Usually, companies without any history would need to have a track record of turnover 1 year after the business launches if your business survives 3 years you know you're doing well. It's really circumstantial. If you tell me what your business is and what youre doing maybe I can give you my honest opinion.

    1. 1

      Hey Carlos - I'm in a really niche field of cybersecurity but I think I have a sound business model. Here is a link to a Medium post that explains it: https://medium.com/@jrmandell/teepee-business-model-3bc89451cc7f

      Curious to here what you think and thanks for chiming in.

      1. 1

        Thank you for the article I will check it out now. If you have some valuable IP and not making any turnover yet, but it's in the pipeline then yes that would be of interest to many investors. If it can be easily copied then it's all about delivery, experience and service. Word of mouth is key.

        As for your company I just read it, I help run a data security company. I guess the first thing that comes to mind that you intend to targeting medium-sized companies, which is great. However, there is an untapped market for startups. The barrier is lack of awareness and knowledge in many of these start ups, many people don't know what Vendor Risk Management is and would just hire an IT manager instead. If you can get to them before they grow for a low price then great. Its the transition phase where you'll make most of your leads with this. Most medium/large companies have CISO's in place to do that job, they will be reluctant to off-shore it to someone so quickly.

        What concerns me is that your costs will be high, and medium/small-sized companies may demand more of your time as there can be many changes as they grow thus needing you more.

        Maybe I've got it all wrong but that's my opinion with the information presented to me and coming from a not so relevant field.

        1. 1

          I think a lot of your instincts are right. In my particular market, there is a ton of nuance so that plays into who I target and why. Honestly, I'd be happy to have a call and we can each share a bit about our company. I always like talking to other Founders about what's what.

          1. 1

            Where are you based?

          2. 1

            Sure why not, I would also look into accelerator programs out there which really do help and help your network massively. Send me your details
            [email protected]

            1. 1

              I'm in Chicago - sent you an email.

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