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What if the reason you’re struggling to raise funding is because you shouldn’t be raising it at all? Many founders waste precious time chasing investors when they’d be better off focusing on building their startup.
I’ll share ten clear signs that this isn’t the right time to raise funding — and how recognizing these signs can save you lots of time and frustration.
We’ll start with what I’ll call Early Stage Indicators that you shouldn’t raise funding. That brings us to number one on our list….
1. You don’t have enough traction.
Like it or not, you need traction in most cases in order to get investors to invest in your startup. Now traction isn’t how many users are using your product for free.
Nor is traction how many visitors you are getting to your website. And traction also isn’t customers telling you they will buy your product.
Traction means one, and only one thing. Traction means revenue. That’s it! The more money you are trying to raise means you’ll need more revenue.
If you’re raising $50,000 to $500,000, you’ll likely need revenue between $1,000 per month and $50,000 per month. If you’re raising $500,000 to $5 million, you’ll likely need revenue between $50,000 per month $500,000 per month.
