The First Priority For Entrepreneurs Isn’t Money
In 2009, after a year of settling into my first job after college, I decided to go after a passion to equip others with the skills to create more value and succeed. So in tandem with my full-time job I started an edtech marketplace startup focused on connecting mentors with high school students that lived in mid-sized cities historically plagued with “brain drain.” Eager and determined I researched the online mentoring market, created a business plan, and spoke to various educators/business leaders in our pilot city — my hometown Little Rock.
Throughout this process of creating a vision for what later became MERIT, I often found myself “stuck” at points which displayed how essential it was for me as a young entrepreneur to seek out advice from trusted advisers as well as build a strong team around. One point of advice that really sparked progress within our company was after speaking with my friend, Floyd (Yes that’s his name & I promise he’s under 35). In our conversation, I stressed the importance of raising money now through (angels/friends) so that MERIT could achieve its ambitious goals of assisting as many students as possible. At the time I thought I had to fund raise before I could build and test the product. I will never forget the advice he told (although I’m sure I’m paraphrasing it): “You have to build some viable process/product first before individuals want give money to you; Investors need to see something before they invest.”
From that advice, I restructured the strategic initiatives of MERIT and sequenced growth to gradually reach my long term vision of the company (rather than immediately). This lead to a very successful and low cost per student pilot program that served as proof for our angels/friends & family that there was a product/market fit and worthy of an investment to test the product at scale. As a Venture Partner at OneTraction and Business Operations mentor to startups, I typically come across entrepreneurs that are too worried about fundraising. I typically remind them that investors are more concerned on how your team and product will have a competitive advantage at acquiring a lion share of a market. Therefore I look for founding teams that focus their energy on creating a product that can prove a strong market fit.
Because just as I learned in 2009, you need to show that are you believe in the mission and vision of your company, with limited resources — which is a good indicator of whether the company can responsibly leverage funds from a SEED or SERIES A round. With most believing a correction in the private tech market nearing, venture capital has become stingier and will look for those companies that are not poised for high burn rates. So your goal as entrepreneurs should be to do more with less.
#IWBITK (I would be Interested to Know): What distractions have you seen entrepreneurs focus on rather than developing their viable product?
