For founders, sometimes the thing that we believe we need is not often that thing that we might actually need. 

Setting the stage: Jorge’s fundraise

At one point, I got connected to a startup founder, call him Jorge, through a mutual connection. 

The founder set up some context for the call to our email prior to the call. 

They wrote to me ahead of time, “We’ve been bootstrapped to date. We are looking at options of next steps to work with investors to build more value and growth so that we can eventually sell. I’d value your feedback and any guidance on what would resonate with Tundra Angels.”

I went into the conversation prepared to talk about how to set this startup up to fundraise. 

I asked several questions: 

Can you give me a high-level overview of your business model and revenue streams?

It was a tech product and with a light service component when minor customization was needed. 

Jorge was newer to the startup fundraising world and so a lot of the questions were answering unresolved questions that he had. 

I asked questions like, What would you use the funding for? What are you trying to accomplish with the money?”

Jorge explained that he wanted investor capital to grow the business rapidly to stay ahead of competitors and eventually sell the business. 

At a high level, those are sensible reasons to look at venture capital. 

Something didn’t add up about the raise

In talking to him, something was becoming increasingly clear. 

But Jorge was a bit shaky on the amount that he needed to raise, he said a couple hundred thousand. He didn’t have a tightly defined idea. 

The use of funds was also very soft and extremely general. It was things like growing the business, build out processes for the business, and stay ahead of competitors. 

✅ Through this, I came to the impression that Jorge was believing that capital to do something for him that it could not. ✅

So I decided to try to clear the air with a question that I occasionally ask depending on the context of the startup and the conversation. 

I asked,  

“Let’s say your fundraise is complete and you have $100,000 in your bank account, right now. What is the very next thing that you would do?”

Jorge’s answer surprised me. 

“I’d hire someone,” he replied.

He went on, “Someone to answer the phone that's not me all the time. Someone to do sales who's not me all the time. Someone to do tech support who's not me all the time.”

What? 

That was surprising. 

Remember the prologue to our conversation? He said, “We are looking at options of next steps to work with investors to build more value and growth so that we can eventually sell.”

Once I asked the specific question, his answer changed. 

Jorge wanted help with the operational and customer-facing work, so he could focus more on higher-level strategy and growth for the business.

Money vs. Time: What was really missing

Two things were immediately clear: 

1. He didn’t need $100,000 to do what he just told me he needed. 

2. He absolutely, certainly, does not need to be fundraising for this. 

And yet, the disconnect was that Jorge went into this conversation saying, “We are looking to fundraise and wanted to get your guidance on talking to investors.” 

But for Jorge, money wasn’t the unlock. Time was the unlock.

I recommended that he would bring on a virtual assistant that would help take some of these things off his plate, so he can focus on things that he really needs to focus on, not things that he shouldn't be focusing on. 

I said, “I know you don’t have a ton of extra cash at the moment but hiring a VA shouldn’t be something that you need funding for.”

The singular thing that I want to call out is, Jorge didn’t see this. 

He just thought, “I need money.” 

The founder money trap

✅This hits at an insight that many early founders believe - the thing that we believe we need is not often that thing that we might actually need. 

But the trap is, we all naturally tend to think that money is the answer. ✅

Money is this scarce resource that we can’t get enough of. That is we had enough of, our problems would be alleviated. 

Well, in the case of Jorge. He didn’t need to fundraise, at least, not yet. He needed a virtual assistant. 

For Jorge, money wasn’t the unlock. It was time. 

Now, as an investor, we’re in the business of investing money. So in a way it might be weird for me to be writing about this. 

At a high level, there are several questions that come to mind when I think about money and fundraises that I think are highly relevant, and it has to do with the role of money in the given startup:

• What is the singular problem, right now, that you are trying to solve with money? 

  • Will money do that for you?

  • Will money be a distraction? 

In the case of Jorge, $100,000 would not have solved the problem he really needed, which was an unlock of time. It also certainly would have been a distraction.

That was what he really needed, now. 

I realized: I was Jorge too

Now, as much as I’m talking about Jorge, as a founder, I was Jorge. 

We had set out to raise $500,000. We talked to investors, we got into some deep conversations about our raise… 

But something was lingering in the background. 

I was fundraising because it was the thing I thought I should be doing.

I didn’t realize it until one of my advisors listened to my fundraising story and told me,

“It sounds like you’ve disconnected the goal of raising money from why you are actually raising money.” 

See, I had these goals that I thought that capital would unlock. 

It seemed to make sense. 

But not until my advisor said this did I realize, “Oh shoot.” 

It’s human nature to overcomplicate the execution. 

✅The thing that I believed we needed was not the thing that we actually needed. 

But I naturally fell into the trap that that money was the answer. ✅

The Execution-First Secret

Furthermore, this is worth an article in itself, but I’m going to say something important here. 

I think there is a secret to some startups' execution - that they don’t wait for investors to come around to give them a jolt to get to the next stage and unlock the next milestones. 

They just execute and continue to throw lateral passes to make one or two yards of progress at a time. They bring on contractors for equity, they spend nights and weekends hacking their way to a product and don’t wait for investors to fund their income so they can leave their full time job and jump into the startup. 

They do everything that they need to without funding and then investors come around at some point and get super intrigued by all the progress they made without them. That’s when investors tend to have conviction of, “This team is special.” 

This may sound counterintuitive coming from an investor. But I want you to win, and the way to win happens in execution and continually moving the ball down the field, one or two hashmarks at a time. 

Closing thoughts

For Jorge, and for myself when I was a founder, the thing that I believed we needed was not the thing that we actually needed. 

But I naturally fell into the trap that money was the answer. 

In my conversation with Jorge, my $100,000 question was telling. It illuminated for me, as well as for Jorge, the one thing that needed to happen next in his company. And it wasn’t capital. It wasn’t activating a fundraise. 

But we don’t execute with that one thing in mind. Until we get objective, its hard to see through the mire of execution.  

So let me ask you:

• What is the singular problem, right now, that you are trying to solve with money? 

  • Will money do that for you?

  • Will money be a distraction to solving that problem? 

If money was not an option to solve this, what would you do instead? 

It sounds ironic coming from an investor, but it would tremendously help founders' scrappiness and execution if they executed as if bringing on capital was not an option. 

While it may seem ironic coming from an investor, founders could significantly enhance their scrappiness and execution by operating as if securing external capital is not an option.

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