Don’t Let Funding Take Out All the Fun
Everyday other day, we hear news of yet other start-up getting funded in millions. Just in the last few days, FreshToHome raised $11 million while CureFit raised $75M. There were many more. In just the first week of May, Indian startups raised close to $250M.
Getting funded is an important milestone in the life of a start-up and certainly warrants celebration. Yet, the post-funding period can be quite tough. It could make or break a start-up. Funding can either cause start-ups to shut shop completely or catapult them to greater heights in their growth journey.
Getting funded can bring about some fundamental shifts in the life of a start-up.
Founder’s Mindset Shift
From a position of being relatively footloose and fanciful, the start-up founders are now answerable to the investors and board. This brings in an unprecedented sense of accountability and demands certain professionalism that might have been missing earlier. Yet, it is important to ensure that you remember to keep having fun. While funding brings an opportunity to grow the business, don’t let the growth come at the cost of the spirit of the organization.
With a sudden infusion of funds, it is easy to lose focus and go easy on your sense of frugality. Sometimes, Start-ups who have been extremely productive and efficient about keeping a tight watch on spending might suddenly go on a splurge. It could be a fancy new office or a luxurious and expensive team outing. Staying focused on cutting unnecessary frills is more difficult than you think.
Focus on the Why
Funding can provide a fillip to the company’s growth trajectory, but it should not change the company’s DNA. Staying true to the purpose and objective of the company is important. For example, a product company cannot suddenly change to a services model just because it needs to meet certain revenue targets set by the investors. Stay true to what you started without diluting your identity and thought process. The key is to balance passion and practicality to ensure that the organization is able to scale meaningfully.
Ensure that the funding becomes a source of strength rather than a millstone that drags the company down.