Raising money is hard. If you’re a first-time entrepreneur trying to raise venture capital or angel financing, you’ll end up learning a lot on the fly. You’ll spend a lot of time educating yourself on the different ways to raise money. Read a lot. Then read some more. You’ll need to find mentors and people who have done it before to help you. Meanwhile, I’ve prepared this visual primer to give you a sense of the emotional roller coaster you’ll experience. (I have some tips for you at the end, too.)
I’m not anti-raising venture capital. Far from it. And if you really want to experience the “startup life” then raising money is a big part of that. So is the accompanying acceleration and craziness. It’s part of the package. It is what startup entrepreneurs live for; the lunacy of it all is one of the major reasons we get into the game. You might not realize just how crazy it is though, until you’ve raised money and you’re trying to clone yourself while running a marathon sprint through the desert with no water or clothes on. Sounds like fun, eh?
This is your brain.
This is your brain while you’re trying to get funding.
This is your brain immediately after you get funding.
And this is your brain almost immediately after that.
So What’s It All Mean?
- Raising money is a pressure-cooker. It’s not a pleasant feeling. And it can be discouraging to pitch people over and over only to have them reject you again and again.
- When you close a round of financing it feels great. There’s no doubt about it; when you succeed at raising money, inside you celebrate that victory. And it is a victory. Thousands of companies never make it this far.
- After closing a round, you feel a momentary sense of relief. The picture above of the egg on a beach chair isn’t there to suggest you go on vacation! It is a representation of the relief you feel immediately after raising money; the sense of clarity or washing out of the brain, at which point you say to yourself, “Ah ha! I can finally focus on my product, building this business and implementing my plan!” Um…
- The euphoria and relief don’t last long. What you’ll realize shortly after you get the money is how it instantly accelerates everything. For starters, you’ll probably throw most of your plan out the window. Time pressure will really sink in which leads to increased spending. Well, at least you have some money now! Closing on a round of financing is more like the firing of a starter pistol than anything (or a start cannon if they had such a thing) — it’s a signal to go even faster than you were before.
- And then your head explodes.
I’m not anti-raising venture capital. Far from it. And if you really want to experience the “startup life” then raising money is a big part of that. So is the accompanying acceleration and craziness. It’s part of the package. It is what startup entrepreneurs live for; the lunacy of it all is one of the major reasons we get into the game. You might not realize just how crazy it is though, until you’ve raised money and you’re trying to clone yourself while running a marathon sprint through the desert with no water or clothes on. Sounds like fun, eh?
Ben Yoskovitz is the founder of Standout Jobs, based in Montreal, Quebec Canada. You can read more Found|READ posts based on Ben’s writings here, and on his original Instigator Blog.
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7 comments so far
10:27 AM PT
Right now I’m somewhere between the race car and the exploding head.
What’s our burn rate?
Can we hold off on a certain hire until Q2?
Don’t want to try to raise series B in July/August.
…and execute, execute, execute.
2:02 PM PT
Fantastic. I couldn’t agree more :-)
6:23 AM PT
Thank you for the comments – I’m glad people enjoyed the post.
@Erik: That sounds like where many entrepreneurs end up — moving from the race car to the exploding head and back. It’s not easy, but it’s what we live for, right?
7:34 AM PT
Great post Ben. You’ve earned the qualifications to write this post :)
10:24 PM PT
Fund-raising does not have to be dull, predictable and boring. There are many different ways to approach any type of fundraisers.For fund raising It needs a great amount of personal commitment, leadership, creativity, resources, determinations, a plan, preparation, marketing, distribution and a finger on the pulse of the needs.There are many fundraising tips answers and solutions, options, variety and pricing schedules, causes and campaigns running.
7:55 AM PT
I couldn’t understand some parts of this article Your Brain. TiYB when fundraising… « FoundRead, but I guess I just need to check some more resources regarding this, because it sounds interesting.
12:36 PM PT
In the vise at present!
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