# Every day we see flashy news of Startups getting funded on digital magazines. Startup raising millions and millions of dollars in funds.

Tealfeed Guest Blog

2 years ago | 3 min read

Every day we see flashy news of Startups getting funded on digital magazines. Startup raising millions and millions of dollars in funds. What we all miss, is the stage at which these startups are. I won’t say the founders are at fault in believing that funding is easy.

It has more to do with the way such news are presented: “A year-old startup gets 20 Million from Blah Blah VC firm” and it is being shared along like anything on social media. But surprisingly, no one ever shared the story of a startup which was profit making and it took them 341 investor pitches to get their first fund.

Are you raising money for your startup?

Let’s assess the probability of success.

If you just have the concept: Your probability of raising funds is 0%

If you want money to build a Minimum Viable Product (MVP) / Prototype / Beta Version: Your probability of raising funds is 0%

If you have validated your idea from 100 prospects: Your probability of raising funds is0.1%

If you have validation for 100 prospects + MVP: Your probability of raising funds is0.2%

If you have validation for 100 prospects + MVP + Non-Paying Customers: Your probability of raising funds is 0.3%

If you have validation for 100 prospects + MVP + Paying Customers: Your probability of raising funds is 0.4%

If you have validation for 100 prospects + MVP + Paying Customers + Large Total Available Market (TAM): Your probability of raising funds is 0.5%

If you have MVP + Paying Customers + Large Total Available Market (TAM) + Validated Customer Acquisition Strategy: Your probability of raising funds is 0.6%

If you have MVP + Paying Customers + Large Total Available Market (TAM) + Validated Customer Acquisition Strategy + Fast Growth Rate: Your probability of raising funds is 0.7%

If you have MVP + Paying Customers + Large Total Available Market (TAM) + Validated Customer Acquisition Strategy + Fast Growth Rate + Complete team: Your probability of raising funds is 0.8%

If you have MVP + Paying Customers + Large Total Available Market (TAM) + Validated Customer Acquisition Strategy + Fast Growth Rate + Complete team + Traction: Your probability of raising funds is 0.9%

If you have MVP + Paying Customers + Large Total Available Market (TAM) + Validated Customer Acquisition Strategy + Fast Growth Rate + Complete team + Traction + Track Record: Your probability of raising funds is 1%

Yes, over 99% of entrepreneurs who seek investments get rejected.

(data source: 1 million by 1 million Roundtables)

Bootstrap first, raise money later.

Do not go to investors as beggars, instead, go as a king. Bootstrap with your pay cheque, savings, friends and family funds. Bootstrap using services, bootstrap to validations, bootstrap to traction.

Investors love to come to the rescue of victory.

Funding is not your entitlement, you have to earn it. Investors and VCs do business by investing, the most basic rule of business is to make a profit. Even if they have an iota of doubt in their mind regarding your startup. They are not going to invest.

If we talk about the percentage of 1 out of 10 funded startups make money for investors. The failure rate of funded startups is really high. Investors are not villain; they just want to secure their investments.

To add on, Investments also depends a lot on the flavour of the season. Which all domains are getting funded. I remember way back one of my friends came up with AgriTech Startups (till this day it is considered as first Agri-tech startup globally). Not a single investor at that point of time showed any interest in his product, even one Investor went at length to say “You have a good team, If you want to start a food delivery startup, right now I will sign the cheque”.

He declined the offer, bootstrapped with his agri-tech idea and today he is operating in 18 countries. That point of time, food delivery apps were in the news and every investor wanted their chunk.

THE BOTTOM LINE IS, DON’T DEPEND TOO MUCH ON FUNDING. WORK ON YOUR STARTUP, INVESTORS WILL COME AND SUPPORT IT.

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