advice candidate goes to: this-edition A all three
Fund it, or do not: the worst time to raise is before you are profitable, and the best is when they call you
Raising before the product, before the fit and before profit means bargaining from weakness with a clock running, and the worst terms are not about money but control: a say in the business handed to people whose job is a return, not the mission. Profitability means time, and being able to wait is most of a negotiating position. Do not get signed before you have the album. With agents making execution cheap, getting to that position before you need anyone's money is more possible than it has ever been; then the choice of investor is yours. Not never raise: raise from strength, on terms you set, from people who came to you because the thing already works.
Decided by. Nobody yet: a candidate for Dinis to read, comment on and decide (keep, rewrite, merge, cut, article first, later, not doing it).
Note. The chapter's centre, which the register lacked as its own node. The article's caveat on price: it might not be profitable today and still be right if the economics improve with scale, but keep the gap small enough to self-fund.
Where it comes from
- For a startup, the most important question is whether they miss it Pillar two: the investors should be calling you (newsroom)
- The controllable founder What this means for strong-minded founders: 'get to the big stick before you need their money' (newsroom)
- Sell, don't issue The starting point: a founder who has already won (newsroom)
What it answers in the 2018 book
- Be a founder answered written, Life Patterns
Where it goes
Chapter Fund it, or do not, part Start the company (drafting); topic Be a founder (or a one-person service).
Other ideas proposed for the same chapter: We study survivors: a risky practice can look like the cause of success when only winners are counted, Investors select for the founder they can steer; control is written into the contract, and founders get replaced, Sell, don't issue: the investor buys the founder's shares, the founder lends the company what it needs, and nobody buys the steering wheel, What breaks: EIS is lost on bought shares, a big early sale reads as doubt, the founder-lender is a creditor, and a broad non-compete closes the fork, Europe's slower, sceptical money suits a founder who can build first.
Node idea:profitable-before-raising in graph.json; see it in the graph. Source: admin/content/graph/ideas.json.