Opposite Day: Avoid the Temptation to Raise Money

When should an I.T. entrepreneur seek to raise money from angel investors or venture capitalists? For a growing number of tech startups, perhaps the answer should be "far later in the game than you think." Why's that?

Ampdesk CEO Alex Rowland is a serial entrepreneur and early stage investor.

Ampdesk CEO Alex Rowland is a serial entrepreneur and early stage investor.

Ampdesk CEO Alex Rowland (Podcast Episode 25) believes some startups spend far too much time writing and polishing their business plans -- and chasing venture money. Instead, it might be wiser to live on ramen noodles for a year or two, sleep on your parents' couch, piece together a working solution and chase your first customers.

Rowland's reasoning? During the 1990s, it typically cost millions of dollars to get a tech business up and running -- especially any type of software or hardware business that required underlying plumbing (i.e., your own data center) to build your actual products. Simply put, many businesses couldn't get started without VC dollars. 

Got Infrastructure? 

Fast forward to the present day, and the cost of entry for many startups is far lower. The cloud gives you an instant infrastructure upon which to build apps, analytics systems and more.

Yes, many companies still need to raise money at inception, but Rowland thinks some entrepreneurs would be wise to call a time out -- and go chase customers instead. Once you have some revenue, he reasons, it's far easier to attract VCs to the funding discussion. In fact, VCs and angels may discover your revenue-producing startup before you discover them.

For more views from Rowland, check out our latest Good Evening, I.T. Entrepreneurs podcast -- Episode 25. Listen closely, and you'll also gain some timely tips about the evolving world of digital media. And check out all of our podcast conversations -- updated at least once per week -- right here.

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