Day 15 Challenge: 💸 Be careful who you take money from

Shaun Latham

15h • 💪🏼 Challenges

Back in the day I had a service based Digital Agency.

I had a mortgage and three young kids to feed.

I had no filter or target customer. I would take money from anyone that had a pulse.

I very quickly realised that choosing the wrong customer can stunt your growth.

I had one or two customers who sucked up all my time and energy.

I effectively ended up with a new poorly paid job.

I then pivoted into SaaS (Software app) which was a more saleable business model.

Around the time of COVID eCommerce was booming.

Interest rates were low and there was lots of 'free money' flying around.

I was contacted by two private investors who wanted to give me money to 'scale'.

I politely declined. I didn't want be someones biatch.

I started my business to be in control, wasn't all about the money.

And my business was growing at a sustainable rate from customer funds (sales).

Several companies I knew did take that 'free' money.

Fast forward 3 years and none of those that took the 'free' money are still in business.

At the year 3 mark, the private investors and one VC all pulled the pin and it was a sudden death for the funded companies.

One of the CEO's used to brag online about how much money he had raised. The most in his industry apparently. At year two the investors had a majority share of his business and the board voted him out of the company he had founded! Yep he got sacked from the company that he founded. He ended up broke, unemployed and his wife left him.

If you can't scale your business without using customer funds (sales) you probably don't have a viable business.

Money won't fix that, in fact it will expose / compound it.

And it's OK just to build a boring solid business that affords you a good lifestyle.

I think we all started our business to have control and freedom.

Growing it organically is the best way IMO. I'd rather take money from a bank than an investor.

But they rarely loan to businesses as they know the risks better than most.

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