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Do you really need money for your start-up?

As reported last week by Business News, the tech start-up community in Perth is severely underfunded as compared to other cities around the world.

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Claremont
Great article and great advice while not taking away from the fact that Perth techs are underfunded. Drip feeding startups is certainly a powerful way to force companies to find the best way to do things without waste, and really hone in on the things that they could do with the extra money when they eventually get it. Interesting that Prof Bhide's paper was from 1992. It should have been compulsory reading during the dotcom craze and maybe it should be now.

LinkedIN
Good advice Charlie. Firstly it helps potential investors de-risk their investment as you can demonstrate the ability to execute (too many entrepreneurs can't manage this part) and secondly, you'll be free from the constraints, either real or inferred, of dealing with new partners. This is especially important early in a projects life when you need to be agile. After you commit to investors your psychological orientation changes, forces conspire to lock you into a course of action and you can lose access to the very things you need most. Entrepreneurs are inclined to "persevere the plane into the side of the mountain" and I wonder how much raising money too soon has got to do with this!

LinkedIN
I think it's a good point - not raising money forces you to really think about what is essential and squeeze every last drop of value from the investments you do make. Ideally that level of efficiency will then stay with the business down the line.

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