Startups Need Strategy, Not Cash!

THE SITUATION

Client approaches business strategist, me, to raise funds for them. They assume they have the real deal and only need to have it put into a pretty document to get that funding. And that funding includes a full year’s salary, a well outfitted class A fully staffed office space. And they want all of this funded before a single dime is raised by the new venture.

THE REALITY

I don’t do that and no one will invest that plan. My job is to analyze and align the entire business. This includes aligning the founders’ skill sets with market realities, seeking collaborators, bootstrapping when possible and getting to market long before raising that first dime to prove the concept for the guys who will invest a dime, lots of dimes.

If properly aligned, most founders are amazed at how little cash they actually need to get started. My current new venture has trimmed its start up cost from $175K to $3,000 by awarding options, taking equity partners and using collaborators that are helping the product get to market quicker and smarter than ever dreamed. The product focus has changed dramatically along the way, the value has increased exponentially, and collaborators have starting coming to the business.

Another client, one I’ll never hear from again, I hope, asked me to help him raise $435K for a holistic all-natural-healing type new venture.

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Don’t get me wrong. There’s a ton of money to be made in the hippy market. But this founder wanted me to raise funds for a company car, a fully equipped office with all new equipment and furniture, salaries for himself ($75K), two part-time hippies, marketing funds for TV advertising, and a well-known hippy healer working 1-2 days a week for $50K. All this without reliable revenue projections! He couldn’t even define his unique selling point.

I suggested he not hire anyone. Simply collaborate with that well-known professional healer, do his own part-time work, get class B or C office space on a short-term lease filled with used furniture, get a multifunction printer for $150, share marketing costs with the well-known guy, use temps when needed, and take the damned bus. I figure he could fund the whole operation with a credit card or maybe a weekend tag-sale. And I offered to help with all of this, but only if he could define the unique value if his service.

I haven’t heard back from him.

Another business and soon to be feature article here, asked for help developing a hub for entrepreneurs in the Hartford, CT area. The site would do everything from collecting details about entrepreneurs, service providers and investors along with validation for each, social components that were really unique, and it already had generated a great deal of interest from local heavy-weights through sheer founder determination and about 1,000 miles of month in sweat equity. His total start up cost was next to nothing. I volunteered to help at no charge because it would provide an avenue for finding new clients and because I liked the entrepreneurial skills the founder demonstrated. Talk about a collaboration!

Anyway, if you want to create something wonderful, something worthwhile, and you're willing to do whatever it takes to get there, even take the city bus for a few months - God forbid, call me to help. If you want quick cash for a company car, still call me. I want to give you a competitor’s number.