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Venture Capital, Angel Investors... or bootstrapping... MONEY is oxygen for a startup. But how does a founder decide which oxygen mask is best for their business? I have some Andelicious Advice to help you choose the best funding option… and oxygen… for your startup. When I’m gardening, driving into Boston, or doing household chores, I love tuning into podcasts. The other day I had two back-to-back podcasts that got me thinking about the question – which oxygen does your business need to soar? The first podcast I listened to was Masters of Scale with Reid Hoffman, co-founder of LinkedIn… and he was interviewing Ben Chestnut, the co-founder of MailChimp. They were focusing on how MailChimp grew without any investment capital. They completely bootstrapped the business. Throughout the interview, Reid was highlighting the importance of Venture Capital to provide rocket fuel for a company's growth. Given his podcast title, Masters of Scale, he clearly is all about scaling a business. His final words of advice: "while I greatly admire the tenacity of Ben and everyone who bootstraps, my hope for each of you listening is that you give a thought to what investment might bring you: More speed. More support. And yes, more on-target advice." After listening to Reid's episode with Ben, I popped up the next item on my listening queue – and it was Gary Vee. Who just happened to be chatting about the exact opposite tactic. Bootstrapping your business. His adamant advice: Take the long road (like Mailchimp) and keep your company employee and customer centric. Yes, it will take longer and yes, you will work harder and have missed opportunities due to learning cureve challenges. Let’s face it… Those who can't raise capital are forced to make money. Which oxygen to choose is not an easy decision. What I've seen and learned after 4 businesses of my own and mentoring clients is that too much capital can mask holes in your business. Founders don’t see problems surface soon enough, and they often over hire after receiving a cash infusion. Being forced to keep operations lean results, IMHO, in digging deeper into creative solutions for tough problems; being more nimble and able to pivot faster; and it keeps the company culture on the employees and the customers, not the investors and their agenda to meet their portfolio’s ROI. Here’s the scoop about VCs – they do a terrific job at raising big funds - $30-$100 million and more. Their customer are the investors in their fund. They need to keep their funders happy. So they become all about your business’ exit… via a sale or an IPO. That’s the only way they’re going to get their money back. In addition, VCs will get more involved in your business. They will take at least one seat on your Board of Directors and you will find yourself working extra hard to meet their expectations. I've raised VC capital - $8 million for our dot com… and we also turned down $14 million from Bear Stearns, may they rest in peace - and I've raised Angel capital - and I've used pure grit and a charming personality to bootstrap a business. I’m a huge fan of bootstrapping and attracting aligned angel investors. They’re called Angels for a reason… but it’s up to you, the founder, to make sure they are aligned with your values and company’s mission. If you don’t feel a good vibe about the angel investor… WALK AWAY. Capital intensive businesses are going to need capital investment. Life Science, Biomed, brick'n'mortar businesses need a long runway until their products are ready to go to market. Electronic consumer products are always in need of some kind of funding, often taking advantage of crowdfunding or an angel investor to build a bridge from prototype to manufacturing to distribution. If you get a large order from a credit worthy company… a big box store or Microsoft for example… you can often find lending opportunities, provided the purchase order is from a credit worthy client. A factoring company will provide a line of credit up to 80% of the purchase order with a 3-4 point fee. Jesse Genet, the founder of the packaging design company Lumi, shares that she used factoring and lines of credit with the bank to finance her company’s early stage business growth. What are your thoughts? VC money to grow fast… Angel funding to bridge the gap between prototype and launch… or bootstrapping? I'd love to hear where you land re: which oxygen mask a startup founder should choose to grow their business. Masters of Scale Podcast with Ben Chestnut, co-founder of MailChimp: https://mastersofscale.com/ben-chestnut-the-case-for-bootstrapping/ Gary Vee: https://www.youtube.com/watch?v=KHIe1GgvqeQ&t=2262s If you have a burning question, please leave it in the comment section… I always respond with my best advice and insights. Are you ready for startup mentoring or some delicious DIY advice for your new business? Then please visit my website, http://andelyons.com where you’ll find all the ways I can add value to your startup journey: strategy calls, pitch deck and one page business snapshot coaching, WBENC application support for women business owners - I’d be honored to mentor you through whatever you’re going through – so please don’t hesitate to reach out. If you’d like to receive an alert whenever I post a new episode, please follow me on Spreaker, Stitcher, iTunes, Spotify or Google Podcasts… and let’s connect on social media! You'll find tons of curated DIY startup advice on my YouTube Channel https://www.youtube.com/user/AndeliciousAdvice and my Pinterest Boards: https://www.pinterest.com/andelyons/boards/. Listeners - thank you so much for tuning in - I am genuinely grateful for your time and presence. Stay strong, stay focused – and please remember – you’ve got this – Cheers! Ande ♥

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