1. Why you shouldn’t raise
investment
Seriously, it can kill your business

2. Sales vs. investment
• Real money comes from customers
– It’s yours. Spend it.
• Investment is fake money
– You’re selling a piece of your ass!
– Investors own you forever.

3. Real vs. fake money
• Real money
– Establishes customer relationships
– Builds share value
– Doesn’t have to be given back
• Investment sucks out your very soul
– Lose control
– Creates dependency & obligations
– Stifles hunger for customer acquisition

4. Investors – false friends?
• Investors create dependence
• When cash runs out, they strike
• Venture capital turns to vulture capital
• You can end up getting eaten

5. Translation guide
• We’ve got 18mths funding
– We don’t have to bother with sales for 18mths
• We’ve raised 250K
– We can waste 250K before we have to run a
proper business
• We’ve got 20K pcm covered
– We’ve let our spending blow out of control

6. Alternatives to fundraising
• Sales!
• Better market research
– Avoid developing rubbish tech you don’t need
• Product / service blend
– Offer a service, develop your product behind
• Licence tech
– In (saves money) or out (makes money)
• Cashflow management
– Pay slow, get paid quicker

7. Sweat equity
• Building partnerships, not selling stakes
• Lasting commitments
• The gift that keeps on giving
• Emotional and practical commitment
• Can be combined with cash
– Choose a committed, helpful cash investor

8. Cutting costs
• £1 saved is £1 on the bottom line
– unlike sales, which is more like £3 to £1
• Keep flexible
– staff, premises, contracts
• Reduce overheads
– save the pennies
• Avoid building rubbish tech which is obviously
never, ever going to sell to anyone!

9. When to sup with the devil...
• Land grab
– E.g. Facebook, YouTube
• Technological developments
– E.g. Pharma, algorithms
• Long customer lifetimes
– E.g. 5 year contracts

10. ...but use a long spoon
• Raise late, get better valuations
• Build convincing data
• Prove traction
• Attain profitability or revenue first
• Choose investor first, investment second
• Don’t take money from idiots
– They’ll be a pain forever

11. Summary
• Delay or avoid raising cash
• Save money
• Research!
– Don’t waste money building rubbish tech
• Consider sweat equity, JVs, partnerships
• Sell more, sell quicker

12. Questions?
• Twitter: @andrewjlockley