<aside>
What really changes after you raise, how to get the most from investors, and what to do when relationships get tough.
<aside> <img src="notion://custom_emoji/8c512b4b-3b9c-48d6-9077-f4e1229f1ddd/233b7f25-b3aa-80b4-bb7a-007a860f872b" alt="notion://custom_emoji/8c512b4b-3b9c-48d6-9077-f4e1229f1ddd/233b7f25-b3aa-80b4-bb7a-007a860f872b" width="40px" />
Raising Venture Capital can provide far more value than just funding alone for your business. It can bring access to networks, the benefit of experience, a much-needed sounding board, and long-term strategic thinking.
</aside>
<aside> <img src="notion://custom_emoji/8c512b4b-3b9c-48d6-9077-f4e1229f1ddd/233b7f25-b3aa-80b4-bb7a-007a860f872b" alt="notion://custom_emoji/8c512b4b-3b9c-48d6-9077-f4e1229f1ddd/233b7f25-b3aa-80b4-bb7a-007a860f872b" width="40px" />
After you raise VC funding, a few things will change in your business (mostly for the better!). Often ahead of raising VC funding, founders will be apprehensive about the impacts, and will theorise that there will be lots of negatives - however it’s worth looking at how you can re-frame these negative viewpoints, and change the narrative to see the positives of VC impact
</aside>
| Negative Viewpoint | Positive Viewpoint |
|---|---|
| I’ll be required to create lots of new reporting for investors, and they’ll require me to constantly update them on progress | Think of it more as an opportunity to regularly celebrate the things that are going well in your business with your VC, and for those things that aren’t, it’s an opportunity to get the VC’s perspective and ask for their input. Don’t be too proud to ask for help - that’s why they’re there. |
| There’ll be new people added to my board, and there’ll be lots more governance to think about | Having VC on your board can bring experience and knowledge to the table. Perhaps they’ve been through similar circumstances with other business and can apply their experience to yours? You can still align your board governance with your company culture - if you have a lightweight and agile culture, you can apply that to the way you run board governance. Your board is a reflection of you as a business, not some strange outside influence. |
| I’ll be expected to scale the business aggressively - VCs will want me to burn the cash then raise again | Raising capital is an opportunity for you to scale your business - and you shouldn’t raise capital if you don’t want to scale. You won’t be expected to play fast and loose with the money, but you will be expected to deploy the money the VCs give you into growing the business as fast as possible - which is EXCITING! |
| I won’t have true freedom to make decisions any more, as VCs will have a tight control over things | Having VCs alongside you can provide an excellent sounding board for your decisions. Your VCs shouldn’t be pushing you to make decisions that you don’t agree with. Not all VCs are up in your business trying to run things - so find the right VC that backs you |
| I’ll be giving away part of my business to someone else, and I’ll own a lesser proportion in my own business than I do today | They’re investing in your business because they believe in you and want to be on the journey with you. If you don’t like them, don’t take any money off them. If you like them, then you can grow the business together |
Making the shift from a bootstrapped to a VC-backed business shouldn’t negatively impact your business operations - quite the opposite! You will need to be aware though, that VCs will have expectations of what they’d like to see from you, and how frequently.
Be open with your VC about clarifying their expectations around visibility:
Often we talk about the mismatch in expectation between what Investors expect from a founder, and what founders want to do themselves. This mismatch often exists because of one single reason - a lack of transparency on both sides.