Fundamentals of Funding
“Raising capital takes twice as long, is twice as hard, and costs twice as much then you think it will so plan for this.” – Bridget Unsworth – Investment Director, NZ Venture Investment Fund
This month, we’ve been working on the A-Z’s of startup funding in an attempt to demystify the different options to consider and get some good grounding on the pros and cons of each mode of raising capital. One thing seemed clear and that is that NZ’s capacity to fund at an early stage is pretty good as long as the value proposition is strong and founders have good capability.
The other thing that stood out was how fashionable raising capital has become. To loosely paraphrase Ben Kepes, how about we look at good old fashioned ways of growing a business like selling product that people want and pay for and slowly growing your own capital? Bootstrapping is refreshingly honest and is probably the smartest and cleanest way forward for many startups. It ain’t glamorous but neither is being heavily in debt, searching for traction, and under great pressure from external funders.
Of course, many startups whose MVP requires R+D, innovation, or physical prototyping may not be able to pursue this course without at least a little peer to peer funding in which case, this newsletter is for you!
: ) Marian and the Ministry of Awesome team.