Not raising money

April 7, 2010 at 2:51 pm Leave a comment

After much negotiation with my co-founders it has been agreed that we will not raise any external money for the initial development of the product. Instead we have agreed a small budget of around £20k for development and will focus on building the best product we can over the next 6 months.

Why do we not want to raise money?

There are many benefits of raising money from Angel investors or VCs, such as time to market, marketing power and attracting more talen. However, a number of factors meant that we wanted to keep this product to ourselves for a little while longer.

Firstly, control. Although it can be great to have an investor on your board to guide you, we want to control the direction of our company a little longer. We have a clear strategy that we now need to execute

Secondly, we’re too early. There are companies that can get funding at just the concept stage unfortunately we are probably not one of them for a number of reasons. For example, its a very competitive market with well established players, our disruption / differentiation is not around the underlying technology and we need to show traction

Thirdly, cost of development. With todays development tools, outsourced development in Eastern Europe / India it is possible to get a product developed for very little cash. Limiting our resources will also allow us to focus and prioritise our development

Our focus over the next 6-12 months will be on building a great product that solves a real problem for employers, getting them to sign up and getting their feedback

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The competition is fierce

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