Changing the world and starting your own company is often a noble and fulfilling endeavor. Founders make many personal sacrifices for a few years in hopes of creating a highly profitable company. Most startup founders think they need to raise copious amounts of VC funds to build their company. Though raising VC funds is not inherently a bad idea, startup founders could save and make more money with other methods.
There is always a risk
Once companies accept VC, their chances of surviving for 5 years drops from 50% to <10%.
Also remember that it is possible as a founder, you may have to pay yourself a low salary and your shares may not be worth much if you sell your company. Also, ,,75% of VC-funded startups won’t be able to pay back their investors.
There are only 3 options available to you once you accept VC funds:
You go public, you sell, or you die.
You don’t always need VC funding
Many great ideas do not require VC funds. Prime examples are eBay and Google; both companies raised VC money, though they did not need to access the funds to raise the company. If you have laser-sharp focus on how to build your product and process effectively, you may not need VC funds either.
So what other options are there? How can I save or make more money?
Young companies need to be mindful of their monthly burn rate, and this includes wages and compensation for employees. When it comes to money, companies tend to under- or over-prioritize their finance department.
Have you considered that you might not need a full-time finance team at all?
As a startup founder with perhaps some seed money, you may be thinking about using some of that money to hire full-time finance professionals. But there are cheaper options.
That’s where we come in. Aquifer Market Services offers day-to-day financial and accounting services at a lower cost than hiring a finance team. Think of us as your virtual CFO. With 15+ years of experience in finance, we can help your company with the finances so you can make the most out of your funding.
We’re your next CFO. You need more than a bookkeeper and less than a full-time CFO. Accounting firms or bookkeepers simply do your yearly tax return but who can help you with the day-to-day accounting & finance complexities that every small business faces? We’re the tenacious partner who will work closely with you to create a strategic path forward. A path that positions your startup for optimum performance, prolonged growth, and limited risks.
According to this ,,article by The Fintech Times, 41% of businesses plan to scrap their banking providers due to slow support during COVID-19. If your business is having trouble with liquidity or managing banking relationships, visit us today at ,,www.aquifercfo.com. Our track record speaks for itself. We’ve successfully raised over $65 million in VC funding and have 15+ years of finance experience under our belt. Our services include financial modelling, data analytics, capital fundraising, transaction advisory, and accounting system setup.
Still not convinced? Ask yourself this:
- Is your financial system set up and organized?
- Do you know your company’s outlook in 3-5 years?
- Are you aware of key factors that impact your financials?
- Are you prepared for tough questions from VCs?
Focus on generating revenue. Leave the rest to us. ,,Contact us today for a free consultation.
Until next time,
Rich Zhou, CEO