Don’t Be Addicted to Fundraising

Fundraising has long been a critical part of success for most tech startups. Over the years, I’ve seen founders who have embraced fundraising too much. They almost become addicted to fundraising, believing that more fundraising will automatically create more growth and lead to long-term success.

In the moment, fundraising can feel a little like giving your startup steroids. It’s easy to feel like it will boost your workforce, boost your sales, and lead to growth. However, fundraising isn’t what grows your startup. It has its purpose at times, but fundraising because you think it’s what makes your startup grow can be a mistake.

Along with venture capital money comes a loss of control. The more startups fundraise, the more founders have to answer to investors. At a certain point, it can feel like you’re working for your investors rather than being the head of your own company. This can make it harder for founders to keep the company on their chosen path because investors may have different ideas. After all, they just want a return on their investment, meaning their goals may not align with yours.

In the current climate, finding capital has become much harder. Many founders are losing to get by without it, which can actually be a good thing. Those who are addicted to fundraising will become more desperate to find investors and end up settling for investors that may not be the right fit.

More importantly, startups don’t always need venture capital to grow. Capital often comes with speculative projects that are aimed at growing the company. But most of those projects aren’t going to pan out. Most of that capital will end up being wasted at the same time that founders are forced to give up control over their company.

The truth is that many tech companies can become profitable without a lot of venture capital or this obsession with hyper-growth. Instead of needless spending and speculative projects, a lack of fundraising can force startups to focus on their core customer and the value they are providing that customer.

Choosing to focus on your customers and the value you provide is what’s going to get your startup to profitability a lot more than fundraising. Without that fundraising or the influence of investors, it’s a lot easier for founders to stay true to their vision. Ultimately, that will be better for most startups than being addicted to fundraising.