Capital is a Means, Not an End

Below is the “Tip of the Week” transcript from the Podcast Episode 32: Capital Outside of the Valley (Morris Wheeler, Mike Belsito):

Morris made a great point during the interview today about how some entrepreneurs view raising capital as the goal and almost become more focused on it than the mission at hand.  I’d imagine most of us have seen this at this point… the entrepreneur that is endlessly networking and on the capital raising circuit.  It’s even more exacerbated by takeaway #1 from today’s episode, now that raises have become a continuous process moreso than an event.  It is often amazing to me to consider the amount of time that a startup requires, especially with a lean team, and yet some folks are able to rub elbows with investors five days a week.  Now, it’s quite possible that these situations are dire and the cash reserve is completely gone, warranting them to prioritize raising cash over all else.  But, this won’t always be the case as you will often see these folks raising for 12 months on-end.  From one standpoint, you have to admire their persistence and hope that it translates to the business.  On the other, if you are reviewing their deck in January vs. their deck in June vs. their deck in December and progress is stagnant, that may raise a red flag.  While passion is paramount, let’s all hope the passion for the pursuit of the mission exceeds the passion for the pursuit of capital.


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