Congratulations, you managed to get someone that is not your best buddy to invest in your high potential company – affectionately known as a “startup”. The question that follows is, “what do you do with all that money?” Right? – WRONG!
If you did not plan your business, if you did not analyze your market and did not put in the work to surround yourself with quality people… the money is not the issue, because it will be gone.On average you are looking at 12-18 months of “runway” (the time you are expected to last if you hold the current course) and what you do during that time will define you. It will give the investor and everyone around you your character card.To be dead serious: funding does not a successful company make. An investor that is willing to support you and your team in achieving agreed goals will drop you faster than you can say “second round” if you keep feeding him fibs and the company is not going according to plan. Treat your investors as partners or things will go south pretty quickly.
To paraphrase a wise man: “Respect is not default! It is something that is built over a series of interactions. At best you can expect a lukewarm tolerance that you can build into respect through achievements”. I find this to be a perfect antithesis of the modern blogger syndrome that curtails to announcing every investment as a success and avoids doing a follow up on the business. Perhaps there might not be a business to interview a few years or even months down the road. Don’t believe the hype, getting funding is a huge burden that is the equivalent to carrying 2 tons of bricks on your back – uphill! Those who reach the top will have a new viewpoint not to mention broader shoulders and understanding. If this turmoil is for you, read on…
Spending lean or investors go mean.
So let’s start at the spending plan. You present your potential investor with a budget. If it’s more of a wish-list than a budget, sooner or later it will show. Be prepared to explain the “why, when, how and what if” scenarios that are a logical test to see that you have covered your bases. Please – don’t do it for the investor but for yourself. One of the qualities most revered by an investor are prudence. It gives the investor piece of mind that you won’t be dodgy with your accounting and loose with other people’s money. Only then can the investor be effective in focusing on other things, like finding contacts and growing the network beneficial to you.
One of my favorite items in the budget is the hardware. Your preferences speak volumes about you and your appetites. Please try and convince me that you must have the latest and greatest laptop for sending emails. Or that the $2,000 ergonomic chair made from humanely euthanised unicorns is a must. A company that is making money can afford to talk about company culture. At the start, you should be talking about teamwork and dedication. You won’t make a sale faster or better with a $3,000 laptop than a $500 one. No one wants a pretentious CEO of a startup – they want someone who will fight for the company and support their team to carry those bricks. Oh and by the way – titles don’t make a difference to anyone but the most narrow-minded, what you do means more than what is written on your pristine business card.