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Sales before raising

· startups,Entrepreneurship,sales,venture

Don’t get me wrong. I love a good pitch night like everyone else – the drama of delivering the brazen vision, sparking the angels’ imagination, and sealing a deal that will set your company on the trajectory of a unicorn. I’m giddy.

 

Sort of. My one beef on pitch nights (and remember, I organize and run pitch nights) is that, on balance, I wish companies would spend as much time researching and perfecting their customer discovery and sales pitches as they do on their raise pitches. Let’s say a startup goes through the tears and fears of raising $100,000 to support market expansion; they have just increased the value of the company and their potential for personal wealth by roughly $100,000. Let’s say said startup grinds out $100,000 in sales following and arduous, angst-filled discovery-MVP-sales process. Let’s also say the startup gets a 5x topline valuation. In the latter case, they have just increased the value of the company and their potential for personal wealth by roughly $500,000. I get it: pitching is sexy and sales is brutal, but which would you rather do?

 

My humble advice – don’t get your cart before your unicorn. Prove you can sell, then do your pitch nights and raising.

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