One Question Friday: To Raise or Not To Raise?
About This Episode
In this inaugural One Question Friday episode, Sam and Shaan advise a 24-year-old entrepreneur on whether to bootstrap or raise capital for his mobile motorboat mechanic business. They discuss the critical distinction between 'rocket ship' businesses and 'car' businesses, explaining why venture capital is often inappropriate for service-based companies.
Episode Description
Links
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Key Takeaways
Use the 'Rocket vs. Car' framework to determine if your business actually needs venture capital, which is designed for hyper-growth or total failure, not steady cash flow.
Identify if money is your true bottleneck before seeking funding; often, the real constraints are operational scaling, hiring, or product-market fit.
Conduct a diagnostic 'pre-sale' by talking to potential buyers early to identify operational weaknesses and understand exactly what metrics are needed for a future exit.