I can’t tell you how many times I’ve been told that the hardest part about raising money is convincing a lead investor to give you a term sheet (and sign it). Ironically, it’s usually an investor who tells me this. Well I’d love to go back to all of those investors and tell them “Look, I have a signed term sheet with half of the round amount committed, and that was the easy part. The hard part is actually getting the other half of the round money!”
Getting investors to put in the other half of our Seed Round is taking much longer, and is much more difficult than I ever anticipated. And it has caused me to be in a state of limbo, where I am constantly being distracted by pitching to investors and trying to get the other half of the round so that I can successfully take my business to the next level.
While I’m pitching to investors, preparing documents, and going through the due diligence process, I am being distracted from running the business in bootstrap mode with my team. Of course I am still doing what it takes to make the company succeed, but without the funding, we will continue to do it in bootstrap mode which is minimal at best. Investors like to see the founders of a tech startup running the company full-time, which we have been. Well we’ve doing it for one and a half years so far, and can probably do it for another six months, for a total of two years without a paycheck. Try living without a paycheck for 2 years, and get back to me with how easy that is…
Since we have proved our concept, gotten a lot of traction, shown revenue, and that we are a dedicated team of entrepreneurs that will make this a success…why is it that investors are still hesitating to finalize our round of funding by filling the other half; Now that we have a signed term sheet and half of the round filled by our lead investors it’s a no-brainer.
Anyone who might have some insight to this, I’d love to hear your comments or your thoughts. Feel free to leave a comment here or send me an email to have a conversation. And of course, any investors out there who would like to answer this question as well, I’d love to hear from you!
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