We are a tech company with over $150k in monthly revenues. People tell us to seek funding. But we don’t want that. Are we right?

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JASON LEMKIN

You are right, do not raise venture capital. $150k in MRR is a time when you will become attractive to many investors, and perhaps, for the first time be “fundable”. But that’s not a reason to sell shares.

There are only 2.5 reasons to raise VC money:

  • You have to, because you need the money, period.
  • You have to, because you need the money to compete (arms race you need to win). OR
  • You don’t have to, but you believe you can get a 10x+ return on that investment in terms of revenue.

Here, you aren’t under any pressure to raise, and if your gut told you that could get 10x the value out of each $1 invested, you’d want to take the money. When founders want capital they don’t strictly need to “go for it” — they know it. You don’t.

Don’t raise venture capital. Not right now, at least.

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Published on August 17, 2017
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