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How Do You Know It’s Time to Quit Your Job and Start Your Own Business?

Posted on Tuesday, Oct 27th 2020

If you want to raise funding, you would need to quit your job and go full-time, because investors generally don’t fund companies that are led by part-time founders.

But it often takes several years of bootstrapping before you’re ready to go to investors.

At 1Mby1M, we support Bootstrapping with a Paycheck. You can find some case studies within my Bootstrapping Course: Bootstrap Using a Paycheck. This video lecture will provide you with important perspective.

It is invaluable to have a job that pays the bills while you’re validating your ideas, getting your strategy together, etc.

Again, investors usually do not fund companies that are led by part-time founders.

Some related information that may be helpful from our Investor Introductions page:

Investors generally only consider deals coming through their trusted networks. If you’re looking for introductions to investors, you can look at joining the 1Mby1M Premium program. We would coach you through the process and make the necessary introductions.

Remember, investors are looking to multiply the money that they put into startups.

A bit more sophisticated way to think about it is to ask the question: Multiply by how much? 2X? 3X? 5X? 10X? 20X?

This question determines the strategies of what they’re looking to do:

  • Look for Unicorns (build companies with billion dollar market caps): Go from 0 to $100M in revenue in 5–7 years.
  • Look for early exits (sell capital efficient startups and make a lower multiple, but nonetheless, have a successful outcome). Read: Best of Bootstrapping: Bootstrapping to an Exit in this context.

I strongly suggest you read the 1Mby1M Seed Capital series of interviews on our blog. We’ve profiled investor after investor to understand their investment thesis.

Just like you look for product-market fit, you also need to look for investor-entrepreneur fit. A seed investor looking for a Unicorn won’t invest in a capital-efficient startup that is better suited to a $30M strategic exit. And vice versa.

By the way, this series is also available as videos on YouTube: 1Mby1M Roundtables. Each roundtable typically has an investor guest.

And the investor interviews are also available as podcasts on all major podcast platforms: 1Mby1M Entrepreneurship Podcast

If you haven’t raised money before, understanding the fundamentals would be critical for you to navigate this extremely complex process.

Before you go up in front of investors, you should be able to answer some questions satisfactorily. In terms of the micro-level evaluation, they’re trying to answer the following questions: The 1Mby1M Self-Assessment.

If you want to practice your pitch and get feedback, please come talk to me at one of our Free Public Roundtables.

Photo by Rik Buiting on Unsplash

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