Ok, let’s take inventory: • You’ve launched your dream? Check • You’ve put together a great team? Check • You’ve built an early version of a market ready product? Check • You even have some early traction? Check Those nights fueled by (insert hip caffeine drink of the day) are really starting to pay off. A vision taking real shape is now blunting the sting of not receiving a consistent paycheck. Up to this point, you’ve self funded your company, but now it is clear that the time has come to get that needed shot of jet fuel to get the plane fully off the ground. Prepare yourself as terms such as AngelList, Convertible Notes, Micro-VC, and Lead investor will soon become staples of your everyday life. Last year, our team at FRB worked with hundreds of early stage companies that began their wade into the murky waters of seed fundraising, often surfacing more questions than answers. While we can’t raise capital for you, we do strive hard to make it suck 2% less! While your situation is undoubtedly unique, there are a few considerations that every entrepreneur should think through before and during their seed fundraise. Although not meant as a complete A-Z guide, the list below provides for some of the items that should be deliberated on: Commit I get it. You would rather spend your time developing product, building a team, and working with prospective partners and customers. And yes, fundraising distracts you from doing that. But remember that your capital foundation is set through your first outside round of capital. Like a home, a creaky foundation can extinguish everything you’ve worked so hard for. Make sure you reserve the appropriate time and resources to raise thoughtfully and strategically. Random side rant: Don’t pay a broker who is asking for cash compensation for finding investors. Your interests are misaligned from get go. Objectively analyze your business The very first question you should objectively ask before seeking outside capital is “what type of business can this be and/or what kind of business do I want this to be”? VC’s live in an idyllic world cast with dreams of Thunder Lizards and Unicorns (for the uninitiated, these are companies that are part of the billion dollar club). As such, it’s important to objectively analyze the potential of your business to determine whether it’s one that’s capable of massive scale or one that looks and feels like a great lifestyle business (whether because of market size, competition, your own goals, etc.). Within tech, we’re conditioned to think lifestyle businesses are a 4-letter word. I’ll tell you with 100% certainty that they are not. Lifestyle...
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