Do you really need investment ?

A recent excellent article on funding for start ups written by Phil McSweeney prompted me to share some thoughts on the same theme. In fact its a simple message, fund raising is not a pre-requisite step and certainly not the starting point for a start up business. I have come across many founders with an idea that think that the first step is to get funding to start their development, this approach is fundamentally flawed. No investor worthy of the name is going to invest in an idea.

As a founder you owe it to yourself to investigate, identify and validate your market and to at least get something close to an MVP before your even start to think about securing investment. Even then raising funds is not a necessity, I have worked with founders who self funded to get to an MVP with a confirmed opportunity who did not need to raise funds at least not in the early stages of the business. Bear in mind the value of your business is much less at the idea stage with an unproven product and therefore you will need to part with a greater chunk of equity than you would with some proof of concept and even less so with some clients.

Raising funds is not a rite of passage , only raise funds when you really need to and when your valuation is as high as you can get it