Start, Finance, Or Grow Your Company With Your Customers' Cash
by John Mullins
venture capitalist Bill Egan famously remarked, "You may have capital and a talented management team, but if you are fundamentally in a lousy business, you won't get the kind of results you would in a good business. All businesses aren't created equal.”
by waiting to raise capital until proof points had been achieved--the magic of customer traction--raising capital, and more of it, became dramatically easier.
So if you need cash for your next venture,I suggest you spend your time on your customers and your business, rather than on raising capital. Once you get customer traction, more capital is likely to follow, if you want it and need it.
new-venture success most often arrives in the shape of Plan B or Plan Z, not the Plan A that has been so lovingly articulated in the business plan.
• Fourth, when venture capital is raised later, once customer traction is proven, the investor's risk is lower, meaning the terms and valuation are better, and making the founder's stake and perhaps control--more substantial, too.
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