Getting 100% of your startup funding advice from investors is like getting nutrition advice from McDonald’s.
“Of course, you should supersize it. Everyone’s doing it.”
Investors aren’t bad or wrong, it’s just that few of them will bring up funding alternatives that aren’t raising more money.
I talk to entrepreneurs every day who hear they should be raising money from outside investors.
Yes, every entrepreneur could use some more cash in the bank. Entrepreneurial poverty and survival stress are real.
But who is telling you the startup and growth game is all about the funding?
“You should get funding” advice comes from incubators, accelerators, tech media, tech investors, pitch competitions, and economic development leaders who measure the game in funding rounds.
Funding makes sense for many software companies, but big institutional funding is not as common as you think.
Did you know that fewer than 20% of software companies outside Silicon Valley raise institutional funding?
Most software companies are actually self-funded with time or savings, lightly funded with friendly angel investment, and customer-funded with revenues.
Why don’t we hear more about practical and efficient funding options?
Because the tech press, incubators, investors, and the rest of the “VC-Industrial Complex” don’t make money when you don’t have outside investors.
There just isn’t a big business model behind not raising big investment.
There is a massive business behind funding, including spending that funding on lawyers, Facebook ads, fancy offices, and exec recruiting fees.
It’s that simple.
