To Fund-Raise or Not: That’s the Wrong Question!

This is a question we get asked often at Peri Ventures, by startup leaders. My answer is that every decision an executive team makes for spending or raising cash ought to be backed by a comprehensive multi-year financial plan based on solid assumptions. Then, if the exec team’s growth curve and projections call for a cash infusion, that’s a great time to talk fund raising, valuations, returns etc. A discussion in a vacuum is time ill-spent.

In addition to an up-to-date multi-year financial plan, another ingredient for success is a reasonably empowered board of directors for corporate governance. Taking investor money almost always enables this.

One question I like to ask CXOs I talk with is “who’s belling the proverbial cat” — who’s overseeing the exec team and keeping them to their promises? What mechanism do you have that lets you step out of the day-to-day fire fighting that comes with running companies and periodically look at the bigger picture?

If you want to know how to build a comprehensive financial model for your small business or startup, contact us.