In the last installment of our lessons learned series, Mike Willee and I covered the topic of mentorship. Here, we move onto funding. As an accountant and entrepreneur, I’m guided by the motto “cash is king.” From the day you start your business, money isn’t far from your mind. While you may have far-flung dreams of one day having enough money to retire to a private island, your more immediate concern is what you have at hand. We’ve all heard the axiom, “you have to spend money to make money,” and that has never seemed truer than it does today. Running a business takes money, even if the staff is just you and your office is your home. You need materials and a means to get your products out to the masses. There is any number of things that you’ll need to pay for to help get your business moving, and that requires funding.  But finding the money you need to survive or even thrive can be a challenge.


One of the challenges in managing your finances is knowing when to spend—and when not to. You need to expend some of your resources to get things started, but there’s always the risk that you might overextend. You don’t want to be burning through considerable amounts of your financial reserves each month without seeing a return on your investment.

Starting from a relatively modest baseline is an effective way to see early returns on your investment, as Alex Quilici explains:

“Lesson learned: Tight operations are likelier to turn profits. Don’t be afraid to fire fast and shrink staff to a skeleton crew, [and] then hire the best people possible as revenue grows. Otherwise you’re wasting money.”

At some point, you’ll likely find yourself looking at how to finance the growth of your business. Where once there was a single, set path to fundraising, there are now several different options available to entrepreneurs. Unfortunately, most people don’t know where to start, as Atscale CEO Dave Mariani illustrates:

“I first sought out the traditional Series A type of VC funds to raise my first bit of capital to get our product to market. What I learned is that the traditional VC funds have gotten so big that they now shy away from funding companies that are pre-revenue. They need to put at least $7–$10M to work to make it worth their while. That means early-stage startups need to have valuations of $14–$20M for VCs to get their minimum 20% equity stake. What I learned is that there is another class of funds called seed funds. These funds (Storm Ventures, XSeed Capital, AME) fill the gap for innovative differentiated companies like mine to get launched. We were successful in raising $2M from Storm Ventures, XSeed Capital, and AME in a seed round, got our product successfully to market, and then raised a Series A to expand our sales and marketing. I just wish someone had told me where to start when we were first launching.”

If you know how to go about it, seeking out investment can be a good way to find the money needed to grow your company. But some companies are choosing to forego fundraising altogether, opting to rely solely on their own financial contributions to scale their business. Bootstrapping, as it’s called, is an attractive option for those who the means to pull it off, as Ross Resnick of Roaming Hunger explains:

“Being an entrepreneur, you’re often led to believe that the only way to grow a business is with angel investors or venture capital. If there’s one major lesson I’ve learned, it’s that bootstrapping is a viable option in building up a successful company. To date, Roaming Hunger is a profitable, cash-flow company that has a year-over-year growth of over 100% every year the company’s been in existence, and it’s all been done through bootstrapping.”

Roaming Hunger is an example of bootstrapping through revenue. Generating the necessary cash to cover operations from sales or pilot projects can be a way to demonstrate traction to angels or VCs or perhaps to bootstrap your way to profitability without any outside investment.

Finally, do not forget that equity or debt crowdfunding will be available in May 2016. Stay tuned; we’ll cover that topic in a future installment.

Trying to make your way through tasks like fundraising can be arduous, especially if you find yourself on unfamiliar ground. Mentors or advisors can prove invaluable, though, when it comes to fundraising strategy. #onwards.

Mary Juetten, founder and CEO, created while earning her JD, and leveraged 25+ years of experience to launch the software.