A lot of entrepreneurs mistakenly equate fundraising with progress. They talk about raising a round as if they just hit a major business milestone.  You can tell that an entrepreneur has fallen into this trap when parties are thrown after closing a round.  Or, when asked about the company, the entrepreneur brags about his latest investors.  This is the wrong way to look at it.  Getting a new investor is not a milestone, and additional capital does not guarantee that your company will be successful.  Money only buys you more time to succeed or fail.  Sure, the cash is important.  The number one reason businesses fail is that they are undercapitalized.  But look at the long, distinguished line of startup tombstones that have raised tens or hundreds of millions of dollars and still flopped.  Capital only gives you time to make your business model work or to postpone your death.  It’s what you do with the money that counts.

Matt Sand

Author Matt Sand

Passionate about making a difference through innovation and entrepreneurship.

More posts by Matt Sand