Debunking Entrepreneurial Myths: I Need More Money!

Feb 12 2014, 12:18pm CST | by

Debunking Entrepreneurial Myths: I Need More Money!

Last week we discussed the popular myth that you need to have a world-changing idea before you start a business. I talked about the need to know the industry you are trying to get into and look for ways to improve it or make life easier for people in it, rather than inventing the next revolutionary technology. If you find a problem and develop an easy way to solve it, your business will have a good shot at success.

This week I want to address one of the biggest anxieties that many entrepreneurs have to deal with: Money. More specifically, one of the most often-expressed complaints from would-be entrepreneurs is that they need more money before launching. I’ve been in that spot and let’s be honest, there is no way around it: you need money to start a business. But if you need more money to launch there are a couple of helpful tips I’ve discovered during my career.

If you think you need to raise more money to launch your business, the first thing you should ask yourself is whether that’s really the case. As entrepreneurs, we usually think big. I know how easy it is to get carried away by a great business idea. However, I think it’s important to keep in mind that old adage about Rome not being built in a day. Many businesses begin very small and gradually generate enough revenue to fully support operations.

In practical terms, that means if you are at the end of your funds without having everything in place that you’d like to launch with, take some time to reassess. Review your business plan and look for the places you can cut, trim back or alter to save money. As a business owner, this is a valuable skill to learn. In the lean world of start-ups, there is never a time when looking for cost savings isn’t a useful practice. In other words, if you don’t have enough money for everything you had planned, sometimes the best answer is to change your approach.

I also understand that sometimes entrepreneurs just need some startup capital to launch. That’s one of the reasons I became an angel investor. It would be hard to set up a 3D printing shop if you don’t have enough money for a 3D printer. So if you’ve combed through your business plan, cut everything that could possibly be cut, and you need more capital, it’s time to look for investors.

This is a topic I’ve discussed at length here and I think it’s a good time to revisit it. As an angel investor, I don’t have the time or the inclination to sit through a pitch if the presenter isn’t thoroughly prepared. That’s one reason it’s important to know your industry, the competitors and what problems your business solves. I may not know the ins and outs of your specific business, but I’ve been an entrepreneur long enough to know if someone doesn’t have all their ducks in a row. If that’s the case, you’ve lost me. You simply must have a thorough business plan and a clear, concise vision to attract investors.

This is not to say I haven’t botched a presentation or two in my day. You will likely have to give a lot of presentations before you find an investor. So if you have a rough presentation, shake it off, do your homework and come back stronger to the next investor.

The second thing I recommend is finding an investor who understands what you are trying to accomplish and fits with the culture you want to create. If the investor wants to make unreasonable changes to your business plan as a condition of investment, I’d recommend finding another avenue. It’s tempting to accept the first offer on the table, but if you can’t get behind the direction and vision of your own company, what’s the point?

Remember that having an angel investor is a much more intimate relationship than a venture capital firm or a bank: clashing visions or personalities could undo your business.

Hopefully this is another myth dispelled. Access to capital is important for startups, but you don’t have to let your money concerns dash your dreams. Get lean and find the right investor. What has been your experiences with generating money to start a company?

Source: Forbes Business


Don't miss ...


<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.


blog comments powered by Disqus

Latest stories

Mummy wearing jewellery unearthed in Egypt
London, Nov 23 (IANS) Spanish archaeologists have discovered about 4,000 years old female mummy wearing rare jewellery in Egypt.
Exercise and fasting could boost brain's functions
Washington, Nov 23 (IANS) Exercise along with occasional fasting is good for boosting the brain's neurons, shows a new research.
One infant dies in Pakistan hospital
Islamabad, Nov 23 (IANS) One more infant died due to lack of oxygen in an incubator and negligence of the hospital administration in Pakistan, bringing the number of such deaths to 19 in the past five days.
American whiskey faces challenge in whisky-gulping India
Washington, Nov 23 (IANS) For the most part Indians love things American, but when it comes to their tipple, the world's largest whisky drinkers usually go for Scotch or their very own home-made brands.

Latest from the Network

14 killed in Afghanistan bombing
Kabul, Nov 23 (IANS) At least 14 people were killed and 35 wounded Sunday in a suicide bomb attack at a volleyball ground in Paktika province of Afghanistan, a source said. "The blast occurred late in the evening....
Read more on Politics Balla
Hamilton wins Abu Dhabi GP, World Championshi
Abu Dhabi, Nov 23 (IANS) Mercedes driver Lewis Hamilton comprehensively won the season ending Formula 1 Abu Dhabi Grand Prix and in the process also clinched the drivers' World Championship for the second time here...
Read more on Sport Balla
Iraqi forces attack IS-held towns
Baghdad, Nov 23 (IANS) Iraqi security forces attacked two towns held by the Sunni radical group Islamic State (IS) in Iraq's eastern province of Diyala Sunday, police said. Security forces backed by Shia militias and...
Read more on Politics Balla
Walmart, Best Buy, Amazon and Sam's Club Black Friday 2014 Sales are Live
The big retailers cannot wait this year and launched Black Friday 2014 sales as early as Friday. These sales are the real deal offering deals that are advertised in Black Friday 2014 Ads. On Friday Walmart Black Friday...
Read more on Black Friday Countdown
Pune FC seal semifinal berth in King's Cup
Thimphu, Nov 23 (IANS) Pune FC thrashed Assam State Electricity Board FC 5-0 in a third round Group-B encounter to seal their place in the semi-finals of the 2014 King's Cup at the Changlimithang Stadium here Sunday....
Read more on Sport Balla
Australia the team to beat at World Cup: Vaughan
London, Nov 23 (IANS) Former England captain Michael Vaughan Sunday said that having hit upon a rich vein of form against South Africa, Australia have emerged as the front-runners and will be the team to beat at the...
Read more on Sport Balla
Taylor Swift to receive Dick Clark Award
Los Angeles, Nov 23 (IANS) Singer Taylor Swift has been named as the first recipient of Dick Clark Award For excellence at 2014 American Music Awards (AMAs). The 24-year-old, who is enjoying a great year with her...
Read more on Celebrity Balla
Australia displace India as top ODI team
Dubai, Nov 23 (IANS) Four-time World Champion Australia Sunday returned to the top of the One-Day International (ODI) Team Rankings, displacing India, after defeating South Africa 4-1 in a five-match series, as per the...
Read more on Sport Balla
Iraqi court sentences Sunni politician to death
Baghdad, Nov 23 (IANS) An Iraqi court Sunday sentenced a former Sunni lawmaker to death on a criminal charge, an official said. "The Central Criminal Court issued today a verdict of death penalty for the former...
Read more on Politics Balla
Amzon Black Friday 2014: $3.99 Blu-ray Movies
Black Friday 2014 Sales events are underway since Friday with the Amazon Black Friday 2014 Deals Week and the Walmart Black Friday Pre Sale. Walmart matched several advertised Black Friday 2014 deals of competitors on...
Read more on Black Friday Countdown