An important thing about raising money

If you’re starting a startup there’s an early decision you’ve got to make… Do you want to sell the company?

That’s a question you’ve got to answer at the beginning if you want to raise money.

There are several ways to raise it. The most popular one is to give stock away. A piece of your company.

So when you do that, you’re already decided that you’re gonna sell your company at some point. Because what investors want is to get their money back. Isn’t obvious?

So if you want to run your company for a long time, don’t raise money that way. Because they’ll push you to make decisions to move things towards selling the company.

It sounds sort of a good deal to give away stock when your company worth nothing, but in the long run it will be painful.

However, there are other ways to raise money. What about giving away future cash flow? Then everything becomes clear and you don’t give away a piece of your company, and eventually you’ll get rid off the investor. Because that’s the goal, right?

Or even better why not raising money through your customers? Kickstarter is a great way.

So unless you plan to sell your company, be very careful about giving away a piece of your it, because you might regret it in the future.