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One of the biggest conundrums in entrepreneurship is raising money. When to raise, how much to raise, who to raise from. When things are going well, it’s easy to raise money. When things are not going well no one wants to talk to you and you feel like you are on an island.
Every time you raise money you sell a piece of equity away. An acquaintance of mine told me once that entrepreneurs undervalue equity.
If you are going out to raise money there are some things to consider outside of the business aspects.
Every company confronts these issues at different stages. The dynamics of raising money change. At seed, it’s to get the snowball moving down the hill. Series A-C companies are doing it to keep the snowball rolling. Mature companies look at fundraising differently. I saw a story where Uptake recently raised another $50M at over $2B in valuation. Lyft just raised $500M at a super high valuation. I doubt that either company needed the money but had other reasons for raising capital.
One thing I have learned, capital raising is like Goldilocks. Not too cold, not too hot, it has to be just right.