By Stefania Aulicino
Every year, over 30% of the entrepreneurs whose companies are listed on the Inc. 500 list of fastest growing companies are on their 3rd company: the prior 2 were unsuccessful.
Too many entrepreneurs end up practicing on themselves.
Financing is NOT a transaction; it’s an organic part of building a business.
Just as you aim to build your product right the first time, aim to build your company right the first time.
That’s why finance is an organic part of building a business
If you operate from scarcity while building your products, you end up having to double back to fix it.
Your product is inefficient.
You divert your team’s attention with problems rather than designing new user benefits.
You drain energy from your organization.
If you operate from scarcity when building your company, you get the same thing.
Inefficiencies.
Team diversion.
Energy drain.
I met Dinesh at the Inc 500 Gala celebration. Dinesh was celebrating 5 years of steady growth and profitably since introducing an exciting voice version of mass emails- phone alerts; phone announcements.
He and his 3 engineer partners had built their product right the first time: 250,000 users is evidence of their attractive offering.
Growth now required a joint marketing and product investment. In contrast to traditional business models which lock customers in with annual contracts, Dinesh allows customers to turn his service on and off as needed. That means the more new services and features he offers, the more customers turn on these services.
Dinesh and his partners did it right the first time, establishing engineering standards to they could scale their product easily. Now the partners were faced with doing it right the first time so their company could scale.
Doing it right takes infrastructure and management depth so their customer experience continues to be award- winning.
Not a small challenge. Dinesh hoped he could fund this growth internally. Or he might want VC for $5 million. Those are big extremes I suggested! Like a lot of entrepreneurs, Dinesh thought he had just 2 options:
1. Fund to the limits of internally generated cash or
2. Reach out for Venture Capital to grow his company.
Would Dinesh benefit from understanding his finance options as well as he understands his technology options? Problem is Dinesh knows his industry better than anyone else. But he does not have time to learn the finance industry to the same level. Yet if he does not understand it, funding sources will take advantage of him.
That is the conundrum of the entrepreneur.
The solution is to learn finance from a fellow business builder, who has invested to understand the finance industry like you know your industry. Not just any entrepreneur; only a fellow entrepreneur who has made funding growth their passion.
That is how you will reveals a different story than you will hear from a
• CPA, expert at documenting the past;
• bank, focused on history-based working capital;
• venture capitalist, with ownership designs;
• an academic MBA program.
In contrast, financial advice from a fellow business builder reveals choices far greater than you think listening to silo-ed traditional sources.
Dinesh is now taking advantage of new insights I shared with him that about entrepreneurial finance as distinct from traditional finance. This new way of thinking provides a solid foundation that lets Dinesh and his team make prudent decision every day.
Finance is an organic part of building your business right the first time. Be careful where you get your financial advice. Operate from abundance.
Let your team focus on scaling your business.
Let your customers buy more of your product
Let your company earn premium prices from raving fans.
Build your company right the first time.
Stefania Aulicino, president of CapitalLinkUSA ensures business owns get cash to keep control of a bigger, more profitable company, faster, safer than they ever thought possible- in any economy. Become a magnet for non equity and equity sources to fuel your growth. Explore our tools, solutions and consulting options tailored for different growth stages and different budgets: www.CashAndControl.com
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