In the fourth diary entries, our student entrepreneurs discuss the importance of money and raising funds for their startups.
Anika Riley, Work Smarter
Few startups can just grow organically without funding. I know we can’t. Merely getting to MVP can be a costly and challenging process. That being the case, I think one of the toughest things to hear as an early stage startup is “we don’t invest in ideas”. It made me frighteningly nervous the first time I heard it, so I think the phrase warrants some context.
“One of the toughest things to hear as an early stage startup is ‘we don’t invest in ideas’.”
An idea means different things to different people. I’m a bit of a perfectionist, and I chronically understate everything to make sure I can over-deliver. So when we were starting out, I thought that phrase meant “we’ll invest when you have serious revenues”. Since my co-founder and I have known from the start that we’ll need funding to get past our MVP stage, that statement was rather crushing. Having investors speak with us in LaunchBox has really helped me form more realistic views of the investment process.
An idea is something you have in a dream, while on a run or over pints. If that’s what you’re pitching, then yes, I wouldn’t invest either. After idea and before sales, however, there’s a whole lot of work. Here, founders are doing endless hours of market research, talking to industry leaders and testing feasibility. Writing a business plan, creating a regulatory strategy, planning execution. Starting to write code, getting input from all sides and then don’t forget: pivot, pivot, pivot.
Now, after some more research and a few more pivots, you’ve got yourself an opportunity. While that might seem like a nuanced linguistic difference, it’s a difference of a few thousand
