If you haven’t already, please study our free Bootstrapping Course and Investor Introductions page.
In general, Bootstrap First, Raise Money Later is still the best strategy. You need to be ready to raise money.
If you decide to raise money, I strongly suggest you read the Seed Capital series of interviews on our blog ASAP. We’ve profiled Investor after investor to understand their investment thesis. You need to get in their heads and get a sense of what they’re looking for, especially if you’ve never raised money before.
Remember, Investors are looking to multiply the money that they put into startups.
A bit more sophisticated way to think about it is to ask the question: Multiply by how much? 2X? 3X? 5X? 10X? 20X?
This question determines the strategies of what they’re looking to do:
- Look for Unicorns (build companies with billion dollar market caps): Go from 0 to $100M in revenue in 5–7 years.
- Look for early exits (sell capital efficient startups and make a lower multiple, but nonetheless, have a successful outcome). Bootstrapping to an Exit is a strategy that this kind of investors love. There are ways of playing this game that are somewhat different from the regular Unicorn pursuit scenario.
Just like you look for product-market fit, you also need to look for investor-entrepreneur fit. A seed investor looking for a Unicorn won’t invest in a capital-efficient startup that is better suited to a $30M strategic exit. And vice versa.
By the way, these interviews are available as Podcasts on all major podcast platforms: 1Mby1M Entrepreneurship Podcast.
And they are also available as videos on YouTube: 1Mby1M Roundtables. Scroll down the page to find our investor interviews.
In terms of the micro-level evaluation, they’re trying to answer the questions on our Self-Assessment page. Before you go up in front of investors, you should be able to answer these questions satisfactorily.
If you want to get specific feedback, please come talk to me at one of our Free Public Roundtables.
Photo by Micheile Henderson on Unsplash
