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- ♞ Should you keep raising?
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Should you keep raising?
A trend I've been observing recently is founders who raise a pre-seed round and then stop raising funds. Previously, there used to be a strict divide between those who would go down the fundraising route, aiming to raise every 18-24 months until they reach an accelerated exit and those who used to would bootstrap.
The rise of AI has made more founders focus on profitability. The fast-changing rate of technology has made it less reliable and strategically sound to focus on growth over profits. Being able to be profitable is now a key to ensure that you can survive long-term, even without capital infusions or in spite of changes in market conditions.
Here are some strategies for following this new path:
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Set budget additions relative to increased revenue. Every time you increase revenue by $500, add $250 to your budget; this way, you’re building a safety net and keeping your income above your expenses.
Continue to build investor relations, even if you aren’t raising capital. When the time comes for a cash injection, you want to already have those connections built. This means you can raise when strategic opportunities come, but otherwise focus on profitability above all else.
Build tools in-house to save money. As much as possible, you can try to keep costs low by building tools in-house instead of paying for products.
When will you next raise? |
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Are you looking to grow your business? Here is how I can help:
📱 Book a Strategy Call to get 1:1 feedback on your pitch, pitch deck and/or fundraising strategy. (If you need general startup advice, then reply to this email, and I’ll let you know if/how I can help.)
Onwards and Upwards,
