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Relentlessly Resourceful
In one of his most famous blogs, Paul Graham discusses the idea of being “Relentlessly Resourceful”. The phrase is often quoted to me by founders as part of the justification for them to continue with raises even after significant failures.
To clarify, many founders will hear 100+ rejections before they raise. But each of them at some point had to ask themselves why they were hearing so many rejections. Simply saying that you are “relentlessly” pushing for funding is justification enough to keep raising when the market rejects you. What you need is to understand why you are failing and adapt to succeed.
What I want to do in this newsletter is focus less on the “relentlessly” and more on the “resourceful” because that part seems have been forgotten!
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How to be resourceful as a founder…
Many of the founders I speak with who have heard 50+ rejections but continue to raise are relentless but not resourceful. When I speak to these founders, I often find that their company is either stalled or running on autopilot as they try to raise for months on end. This is not a winning strategy.
Instead, you need to focus on resourcefulness. If you aren’t raising but need funds then one of the first things I recommend is doing things that immediately help increase business and investment chances. These included leveraging social media, ads (if you have the budget), conferences, networking events, etc. These are all places where you can attract both customers and investors. Being resourceful in this way allows you to start seeing your revenues grow without abandoning your fundraising efforts.
Another option is switching your focus to hiring. It might sound counter-intuitive, but most pre-seed/seed stage companies are raising funds to afford a handful of key hires. Instead of giving up 20% of your company to investors, then another 10% + the cash raised to hire those early employees, why not skip the middle man and give 30% of the company to 1-2 key hires who can make a significant difference for your business? If you are a technical founder maybe that’s someone to oversee the marketing/business side, if you are a non-technical founder, maybe its someone to build your product. Either way, you might be able to accomplish 80% of what you would have with the funds you raised without needing to put the company on pause and spend months raising.
Finally, I’d recommend looking at government grants and other sources of free funding. Lots of pitch competitions, universities, local networks, governments, etc, provide startup funding. Focusing on securing these smaller amounts could help you move forward and even avoid an entire round of dilution!
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