Build foundation for great company long term, or get easy money first that don’t align with your overall goals for your startup? –@RobbieAb
Never take money before you have a company already cruising along.
I’ll give you an eample (and I wrote about it here). I started a website, 140love.com, a dating site for twitter. Also, 140labs.com, a way for companies to manage their presence on twitter. I combied them together into one company. I had $500,000 raised in a first round.
Then…I realized it was a bad idea. People go on dating services anonymously. Twitter is mostly not anonymous. I had already spent good money building these sites. I could’ve paid myself back with the money raised. But I turned away the money and sent back the money already wired.
Some people said to me: just use it to figure out a business. Never turn away money.
But this would’ve been wrong. Not only for my investors who were trusting me. But because if I didn’t really know yet what business I had, I could’ve ended up wasting the next two or three years trying out idea after idea with their money and disappointing everyone.
I don’t do that.
Create a product, get people using it, find out what’s wrong with the first version or two of your product, iterate, and when you finally have a business model or even better: paying customers, then you can take money. Because then you know what you will do with it, and you will have a reasonable chance of making your investors happy in a very competitive world. Making them happy will make you happy. Make sure you always have the highest probability of doing that.