It's also made me think. Why pitch? Why take investment at all?
What's good about taking investments:
- Yay money!
- When we have money we can spend money strategically, whether that's on marketing, development, infrastructure, or whatever.
- Yay advisors! These are now invested advisors, so they extra want you to succeed. After all, it's their money and they'd like it back eventually (and some more, too, please).
- If you have competitors (hint: you do), and they can outspend you, then taking investments gives you a better chance of keeping up.
What's bad about taking investments:
- It's a huge distraction from that thing you're actually supposed to be building. Yeah, your company. That thing.
- You have to give up a chunk of your company. Sometimes it's a lot of the company, which limits your ability to direct and control your company going forward. Oh, and you only have 100% of the company total, so you can't get too many investments (or investors) without getting to 0%.
- You get advisors, yes, but you get biased advisors. Someone with a stake isn't going to be as objective as a true third-party.
- Boo money! Laugh away, but it's true. If you don't have much money, you really think about every bit you spend, and you're more likely to spend money - and time, and focus - on things that are strategically the wrong thing to do. Sometimes being tight with money makes you really consider the strategic implications of what you're doing with what little you have.
Don't get me wrong: sometimes taking an investment is the right thing to do. Sometimes you need it to grow before your competitor does. Sometimes you need it because what you're creating is capital intensive. Sometimes you need the advisors and this is the only way to get them.
But most of the time, at last consider self-funding first. Taking in an investment is a choice, not a stop along the way.