STARTUPS AND FUNDING?


Investing & Money
piece written on the 10th November 2015 by  

Regular followers of my blog will have picked up that I’ve been doing some writing for the Awethu Project and went into some details about their funding options. I’d like to write a final post on why someone would want to apply for funding and I’m going to do it very much from a personal opinion based on my experience in this field.

Several months ago I was invited to be a mentor at the Net Prophet Sparkup! event. At the event I would be available to startups as someone who could advise them and it would work sort of like speed dating. Each startup would get 5 to 10 minutes of my time to discuss their business and get opinions from me. It really was an incredible experience, but the best part is that I felt like I was being mentored as well. I left this specific event filled with a wealth of new knowledge from both a start up point of view (I have a few start ups) as well as an investor point of view. But the biggest thing I learnt was why funding is important and I’ll tell you why. I’ve bootstrapped all my startups and I’ve always worried about accepting funding and losing a share of my business – call me greedy.

I twiddled my thumbs for a while trying to think of the biggest two reasons that I could think about to encourage someone to look for funding. It’s really difficult to summarise all the things that come with a start up, but the two reasons I came up with I feel are incredibly important and very few startups will be able to avoid both of them. These are not the top two reasons nor the best two reasons, they’re two of my opinions that are based on being on both sides of the equation and from having worked with a number of startups.

#1 Access to information

Several years ago I worked for a mobile voice over IP company which ended up being bought out for a good amount of money. The biggest lesson I learnt working there are head of marketing was that it’s not all about money and that the company only sold once the investor had changed. See, the original investor had money but that was all. The second investor didn’t have as much money, but he had access to a radio station and it’s through said radio station that the acquisition came about. Looking at the Awethu Project, one of the biggest draw cards for me is the access to information. You’ll need people who understand the law and finances – you simply cannot be a lawyer and accountant whilst trying to launch a business, leverage this access to information to your benefit whilst you concentrate on your great idea.

#2 Create a runway

I don’t care what anyone says, starting a business is difficult. Apart from taking up hours of your day, it will eat into your money no matter how you go about it. We read success stories on the internet constantly about people who started a business and made billions in months – don’t fixate on these, a lot of the time a great deal of information is left out, we don’t know the context and to be honest, they’re few are far between. You will need time to work on your idea, you will need time and energy to acquire customers and the list of things you need will get bigger and bigger, and with that comes a cost. With investment you buy yourself time, instead of doing the marketing yourself, with the investment you could hire someone to do the marketing for you – simple example but you get the point. We Awethu Project offers different funding options with great amounts of money that would assist you with creating this runway that I’ve spoken about.

Running a startup is stressful, but it’s just as exciting and exhilarating. Creating opportunity for yourself through starting a business is hugely rewarding and if getting funding is the answer to getting the success then don’t stop yourself! Look at the biggest and most funded company’s over the past few years – the original founders normally only own a few percent of the company, but that few percent of a massive buyout is better than being greedy, keeping all the equity and not ever hitting a pay day.

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