Bob Smith, Co-Founder and Principal here at Bridgepoint Consulting, recently contributed some entrepreneurial insight on raising capital in a community forum about entrepreneurship that accompanies an ebook that was recently published by award-winning technology author Steve Guengerich.
“Naturally Caffeinated: Addicted to Entrepreneurship”, is a free, 90-page ebook that is loaded with lessons in entrepreneurship from world-leading practitioners using the innovative digital publishing platform Weeva.
The following passage is a little bit of wisdom from Bob about raising capital that can also be found among many other insights in the Naturally Caffeinated community edition in which entrepreneurs are encouraged to share their own personal stories.
I’ve worked with hundreds of entrepreneurs during my career, many of whom were trying to raise money. I’ve observed that the wisest of these entrepreneurs understand the value of aligning with the most experienced and strategic investors possible—not worrying so much about dilution. These entrepreneurs understand that the most important factor is a large capital investment to ensure their company will have the funds to fuel their continuing growth. These entrepreneurs will also seek to leverage their investors to open doors to potential customers and strategic partners and to optimize the company’s business model. Often I see CEOs looking for “dumb” money which will pay a higher price for their investment but tend to not hold the CEO as accountable. I view this as a red flag about the insecurity of the entrepreneur who is more concerned about staying in control rather than the ultimate success of his/her company.
There are not many absolute guarantees in regards to starting companies. But one absolute is that it always takes longer to build your business and it will always take more money that you estimate you need! So plan accordingly.