Manmohan S. on LinkedIn: Do you know 90% of bootstrapped businesses survive? Seeing countless… | 77 comments (2024)

Should your #startup raise money or bootstrap? 🤔 For starters, it depends on the business model and industry you're in. Get informed on the subject in our blog here: https://lnkd.in/e8Syx8VU#startupfunding

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As a founder, tech startup culture will tell you that you should ‘always be raising.’ That’s a big mistake, and here’s why:Something I heard very early into our journey with Chezie was that I should always be fundraising. That is to say, fundraising is one of my jobs as a founder and I should consistently be looking to make connections with investors and always be open to taking money. That advice felt fishy to me, and now that I’ve gone through the process, I know why. There are two problems with this idea of always raising:𝟏. 𝐈𝐭 𝐭𝐚𝐤𝐞𝐬 𝐲𝐨𝐮 𝐚𝐰𝐚𝐲 𝐟𝐫𝐨𝐦 𝐲𝐨𝐮𝐫 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬Fundraising is a distraction. If you’re doing it right, fundraising should eat up 75-90% of your time. That’s time that you’re not building talking to customers, building product, and managing your team. Interestingly, I’ve heard multiple investors who I respect say it's a red flag when a founder is consistently attending startup weeks or founder mixers because they see it as a sign that the founder isn’t focusing on what matters.𝟐. 𝐈𝐭’𝐬 𝐨𝐧𝐥𝐲 𝐚𝐩𝐩𝐥𝐢𝐜𝐚𝐛𝐥𝐞 𝐢𝐟 𝐲𝐨𝐮’𝐫𝐞 𝐚 𝐟𝐨𝐮𝐧𝐝𝐞𝐫 𝐰𝐡𝐨’𝐬 𝐜𝐡𝐚𝐬𝐢𝐧𝐠 𝐭𝐡𝐞 𝐕𝐂-𝐥𝐞𝐯𝐞𝐥 𝐨𝐮𝐭𝐜𝐨𝐦𝐞The idea of always fundraising should only apply if you’re a founder building something that truly requires VC. 99% of startups would do best to either not raise money or raise a single, small round to get off the ground and then not raising again. Though it hasn’t always been the case for the past 3-4 years, investors want to invest in businesses that can be sustainable. If you need a new round of capital every 12-18 months, then you’re probably not sustainable.With that being said, some businesses require multiple rounds of VC to grow (ex: Rivian electric cars or Figure AI robots) because it’d be reeeally hard to get these businesses going millions or billions of dollars. Instead of always fundraising, focus on maintaining relationships with investors. Send investors monthly updates and check in with them every couple of months to share progress. The rest of your time should be spent on the important stuff.You’re not always fundraising, but you are always leaving the door open. There’s a difference.#startups #fundraising #startupadvice

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𝗬𝗼𝘂 𝗱𝗼𝗻'𝘁 𝗻𝗲𝗲𝗱 𝗺𝗼𝗻𝗲𝘆 𝘁𝗼 𝘀𝘁𝗮𝗿𝘁 𝗮 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀! 📈Understanding market opportunities is crucial. It's not about your money but the idea you bring to the table. If you can identify a need and offer a solution, even the biggest investors will be drawn to support you. As a founder, your focus should be on the strength of your idea, knowing that financial backing will naturally follow.In the startup jungle, a strong brand isn't just nice to have—it's your survival gear. From my experience with countless startups, I've seen how a killer brand helps you stand out, attract customers, and dominate the market. But knowing your market is as crucial as raising funds.#Startups often face high costs, low revenue, and uncertain outcomes, which is why they seek funding from various sources such as venture capitalists, crowdfunding, or loans.𝗧𝗶𝗽𝘀 : -● Look For the Opportunity in the market (make someone's life easier or create something that stands apart)● Meet business owners or people and ask what problems they face. It can be anything. Then, try to crack the metrics.● Start freelancing so that you can understand different types of business ideas.● Startups are distinguished by their agility, flexibility, willingness to take risks, and pursuit of rapid growth and scalability.What’s stopping you from implementing your ideas into business? Share your thoughts 🤔.........#business #businessmindset #businessidea #money #trending

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Founders obsess over raising money for their start-up, and it goes without saying that securing capital is a necessary component of any venture building strategy.But hear us out.... there is such a thing as raising too much money. 🤯 Here are the reasons why you shouldn't think about fundraising as an end in and of itself:💸 Every dollar raised comes with dilution. As a founder, cumulative dilution can put you on a slippery slope of reducing your personal return from the start-up, losing control of it, being removed from it, or all of the above.🐖 Jeff Bezos famously said "constraints breed creativity." The fact is that overly-funded start-ups don't always act with the required urgency and tenacity to maximize their venture's potential. Capital constraints incentivizes founders to think outside the box, be frugal, and obsess over their unit economics... all good things for building a great company.🔭 Time spent fundraising is time spent away from executing. And without the actual execution of your idea, even the best pitch deck won't guarantee success. Well done > well said. The truth is if you build a business that actually works for customer and has the potential for exceptional growth, investors will find you.Moral of the story? Capital is a means to achieve a goal, and the more clear that goal is, the easier it will be to find the right amount and source of capital for you.#venturebuilding

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We spend a lot of time with founders and it's very common for them to have a mindset where fundraising is the goal, rather than an instrument to affect the goal.This is true even for some investors who, rather than invest against a thesis of underlying value, invest against the likelihood of the startup receiving follow-on funding.Why is this so? Part of it is myopia, fundraising is so critical in the early stages that sometimes we lose the forest for the trees. Part of it is ZIRP, where there was no real advantage to invest in fundamentals when capital was basically free.Either way, founders who don't see capital as a means to an end are limiting themselves in a few ways.First, they are failing to fully understand dilution, control, and other cap table dynamics which will affect them long-term.Second, they are bypassing the critical step of figuring out their purpose, their 'why,' and using that as their North Star.Third, they are forgoing the wide array of alternative financing/capital strategies which might be more efficient for them.Just remember: capital is a means to an end. Without an overarching goal beyond fundraising, startups will be playing checkers in a chess game.

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I wrote a little something to 'help the helpers'. ✍ Here is the framework I developed to help others in startup-support roles (VCs, ESOs) help startup CEOs & founders raise early-stage capital. I'm calling it, "A Helper's Guide to Startup Fundraising: 7 steps to help a startup CEO raise early-stage VC funding".Note: This is purely to help a company 'prep' and yes, the process is involved. Measure twice and cut once.Also, I think my new favorite phrase is going to be 'MVB' -- most viable blurb. 😂 Helping a startup craft their 'most viable blurb' is massively helpful. https://lnkd.in/ejtJgfHm

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I Have Helped Founders Raise Millions. Here Are 7 Fundraising Mistakes I See Many Startups Making — And What You Need To Do Instead. https://lnkd.in/gf7BAy5e #digitalmarketingstrategist #digitalmarketing #emailmarketing #digitalmarketingservices #strivingforgreatness #yourvirtualangel #socialmediatips #functionalmedicine #propertymarket #bigbusiness #businessowner #selfpublishedauthor #socialmediamarketing #podcastmarketing #ecommercestore

Bootstrapping vs Seeking Funds. What do you choose? Funds do not come with a color; they come at a cost!What's the right time to seek funds?💸Until you reach the phase where you have a well-defined strategy for marketing, sales, channels, product, and customer type, entrepreneurs should opt for bootstrapping.Why early on bootstrapping? You may ask. 🤷♂️1️⃣ You prove your business model with limited resources2️⃣ You grow at a manageable pace; lesser risk of failure3️⃣ You avoid the burden of repaying 10x to investors4️⃣ You're not pushed into unsustainable growthZerodha's success story exemplifies how bootstrapping can lead to organic growth and substantial rewards over time. GitHub's journey shows the patience required when bootstrapping a business.So when to seek Funds?🤔Opt for funds once you have a proven business model, a clear strategy, and a stable foundation. This is when external investment can help you scale more rapidly and effectively. 📈Companies like Uber have leveraged substantial funding to expand their reach and dominate markets worldwide. Conversely, WeWork's experience highlights the potential pitfalls of excessive reliance on funding, leading to challenges in achieving profitability and sustaining growth.Remember, funding should accelerate your success, not define it.☝️DM me to help you create a detailed financial model just for you, helping you understand when you'll need funds, how much you'll need, and how you can effectively repay it.#StartupStrategy #fundraising #startups #entrepreneurship

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Don't rely on pitch deck templates. Especially theSequoia Capitaltemplate.I'm no Moses, but focus on a framework instead. And here's what has worked for me.First, investors aren't looking for "eligible" or "deserving" startups. Investors are looking for startups that can deliver returns. As founders, you need to be able to show the path to those returns.So ask yourself what type of a startup you want to build▶ Lifestyle▶ SME▶ Social▶ Buyable▶ ScalableMost investors are interested in Buyable and Scalable. Unless the investor has a mandate to fund Lifestyle, SME or Social startups.Secondly, you need to focus on a story. But your story has to be about a use case. Not an episode of How I Met Your Mother.Thirdly, your investors might not be potential users or customers. So don't use the same sales pitch that you would do for customers.The most important question you answer with your pitch and pitch deck is why are you fundraising?𝙄𝙛 𝙮𝙤𝙪'𝙧𝙚 𝙧𝙖𝙞𝙨𝙞𝙣𝙜 𝙛𝙪𝙣𝙙𝙨 𝙛𝙤𝙧 𝙑𝙖𝙡𝙞𝙙𝙖𝙩𝙞𝙤𝙣 - what would be the signals?𝙄𝙛 𝙮𝙤𝙪'𝙧𝙚 𝙧𝙖𝙞𝙨𝙞𝙣𝙜 𝙛𝙪𝙣𝙙𝙨 𝙛𝙤𝙧 𝙂𝙧𝙤𝙬𝙩𝙝 - what does growth mean?𝙄𝙛 𝙮𝙤𝙪'𝙧𝙚 𝙧𝙖𝙞𝙨𝙞𝙣𝙜 𝙛𝙪𝙣𝙙𝙨 𝙛𝙤𝙧 𝙀𝙭𝙥𝙖𝙣𝙨𝙞𝙤𝙣 - Why, how & when?Here are the areas that you should cover. Not everything is required, but more the merrier▶ Purpose▶ Problem▶ Solution▶ Why Now▶ Market size▶ Traction▶ Competition▶ Product▶ Revenue model▶ Why us▶ Road map▶ Financials▶ Milestones▶Demo▶ AskStarting with your Purpose or Problem is always good, followed by Solution and Why Now. You can shuffle the order of the rest to suit your story.#startups#fundraising#pitching#pitchdecks

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🔍 Discussion of Venture Fundraising Metrics: Simplified! 💡Hey LinkedIn community! 👋Are you navigating the exciting yet complex world of venture fundraising? Here’s a quick rundown of key metrics that can help you understand where you stand and what investors are looking for! 1. Burn Rate What it is: The rate at which your startup is spending money.Why it matters: Investors want to know how quickly you're using your capital and how soon you might need more funding.2. Runway What it is: The amount of time your startup can operate before running out of money.Why it matters: This helps investors understand how long you have to achieve your milestones before needing another round of investment.3. Monthly Recurring Revenue (MRR) What it is: Predictable revenue that you expect every month.Why it matters: Steady revenue streams are crucial for growth and sustainability, making your startup more attractive to investors.4. Customer Acquisition Cost (CAC) What it is: The cost associated with acquiring a new customer.Why it matters: Lower costs mean more efficient growth. Investors look for startups that can scale efficiently.5. Lifetime Value (LTV) What it is: The total revenue expected from a customer over their entire relationship with your company.Why it matters: High LTV indicates that customers find long-term value in your product, a positive signal for potential investors.6. Churn Rate What it is: The percentage of customers who stop using your product over a certain period.Why it matters: High churn can signal problems with customer satisfaction or product-market fit. Investors prefer a lower churn rate.7. Gross Margin What it is: The difference between revenue and the cost of goods sold, expressed as a percentage of revenue.Why it matters: High gross margins can lead to higher profitability, which is attractive to investors.Understanding these metrics can demystify the fundraising process and help you tell a compelling story to potential investors. 💪Got questions or want to share your experiences with fundraising? Drop a comment below! Let's get the discussion going. 👇#Startups #VentureCapital #Fundraising #Entrepreneurship #Metrics #BusinessGrowth #Investment #EntrepreneurLife #StartupAdvice#SeedFunding #ScalingUp #StartupCommunity #FundingStrategy#BusinessInnovation

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