There are multiple schools of thought on raising money. And no, I'm no authority on it (as I am still yet to be successful), but I have spoken with many startup founders and observed many others. But the two major ends of the spectrum of raising early money is:
- Raise the basics of what you need to get to your next goal (usually 12-18 months)
- Raise as much as you bloody well can
After witnessing some extreme examples of the latter (Color and Blippy are two that come to mind) get hyped and then fizzle, while watching companies like AirBnB and Sonar get really creative with smaller amounts, I have a tendancy to favor leaning more towards the former.
There really is not a rule to anything -- and I'm not a fan of that type of thinking -- but I heard a story the other day that made me pause and wonder how much it applies to startups. Basically, it goes like this:
A guru gives a young boy a butterfly forming in a cocoon and tells him not to help it, no matter how much he wants to but the boy does it anyway and the butterfly dies. The guru tells the boy:
“You don’t understand. You didn’t understand what you were doing. When the butterfly comes out of the cocoon, the only way he can strengthen it’s wings is by beating them against the cocoon. It beats against the cocoon so it’s muscles will grow strong. When you helped it, you prevented it from developing the muscles it would need to survive.”
It may or may not be a true story, but I like the sentiment. With every struggle we've been through, with every set back and with every challenge I am learning something about myself, building a business and I am growing. I've made mistakes, but learnt to fail fast, learn and move forward. I've learned to be agile and to ask for direction. I've sought out mentors to guide me. I've learned that I am stronger than I thought I was. I've learned what I didn't think I'd ever need to learn. I've discovered I can sacrifice and the depths of my commitment to Buyosphere and my team.
And, sure, I may be justifying all of my struggle to make myself feel better, but I truly believe this is all part of the startup story. I fell in love with AirBnB because of theirs (the campaign cereal). And as I feel like I'm getting closer to the ability to hit the road running, I've learned some fundamental lessons on how to run so that we run faster, smarter and more efficiently. In the shadow of the Goliath funding round we just found out a potential competitor (that came out of nowhere) raised, I feel our team is well-equipped to face the future battle.
None of this would have been possible if someone dumped a boatload of money on us from the beginning. And when we finally do raise the money we've been looking for (which is enough for the next 12-18 months), I'll really appreciate it.
My muscles are strong. It's time to fly.