{"id":2422,"date":"2015-10-22T10:00:25","date_gmt":"2015-10-22T17:00:25","guid":{"rendered":"https:\/\/berkonomics.com\/?p=2422"},"modified":"2015-10-20T09:19:07","modified_gmt":"2015-10-20T16:19:07","slug":"raise-money-on-good-news","status":"publish","type":"post","link":"https:\/\/berkonomics.com\/?p=2422","title":{"rendered":"Raise money on good news"},"content":{"rendered":"

The first rule for raising money is to do it on good news \u2013 right when sales are increasing at an increasing rate.\u00a0 Or when a major customer signs a significant deal.\u00a0 Or when something happens that makes an investor think this company is about to break out.<\/p>\n

Unfortunately, the longer you wait without significant upward news, the harder it is to get attention.\u00a0 It\u2019s human nature for investors to want to buy into a fast growing future, proven by some event in the immediate past.<\/p>\n

That\u2019s the rub.\u00a0 Raising too much too early dilutes the founder interest to unacceptable \"money1\"<\/a>levels.\u00a0 So in recent years, I have counseled founders to raise enough to accelerate to a significant milestone that is over a year away, and to scale the business to find breakeven with two early rounds if possible.\u00a0 Once at breakeven, the rush to raise more is over, and there are far more options available.\u00a0 Tech businesses today can do this much more easily than a decade ago, with cheaper development costs \u2013 as one example.\u00a0 Another is to take in consulting work to pay some of the costs during the early stage of a company.<\/p>\n

If you have been in business for a while and don\u2019t have significant good news to tell, I would make a list of possible strategic investors, people or companies that would benefit from your product or service.\u00a0 They will be immune to the disinterest shown by financial investors.<\/p>\n","protected":false},"excerpt":{"rendered":"

The first rule for raising money is to do it on good news \u2013 right when sales are increasing at an increasing rate.\u00a0 Or when a major customer signs a significant deal.\u00a0 Or when something happens that makes an investor … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[5],"tags":[],"class_list":["post-2422","post","type-post","status-publish","format-standard","hentry","category-raising-money"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/berkonomics.com\/index.php?rest_route=\/wp\/v2\/posts\/2422","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/berkonomics.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/berkonomics.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/berkonomics.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/berkonomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2422"}],"version-history":[{"count":0,"href":"https:\/\/berkonomics.com\/index.php?rest_route=\/wp\/v2\/posts\/2422\/revisions"}],"wp:attachment":[{"href":"https:\/\/berkonomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2422"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/berkonomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2422"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/berkonomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2422"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}