when not to raise money May 4, 2007
Posted by Timothy Li in Entrepreneurship, Venture Capital.trackback
I had a chat with person A from a local VC firm two weeks ago regarding my B-mote project. I received the following comments towards the end of the chat:
“Do not raise money right now, even if you manage to raise money, you will waste it”
“Before you do anything else, go to your customers directly and pitch them. when they want your product and you need money to make it, that’s when you raise money”
What person A said made a lot of sense. lesson learned.
Isn’t there a bit of the chicken or the egg scenario here? In order to create demand you need to develop the product and promote it, to do both you typically need money. Now I guess it depends on the product, and I agree you should take it as far as possible without getting outside investment, but I think you can’t wait for customers to want your product necessarily
Of course they work at a VC and have experience and I don’t=)
thanks for stopping by James.
Just read your Q and A with Jacqui, cool post =)
Thanks, I was pleasantly surprised that she took the effort to respond, she seems quite accessible.