Question: What do you wish you knew then about seeking funding that you know now?
Learning is Fundamental
"Learn as much about the legal process as possible so you are aware of what's going on around you. It's not only nice to know about what you'll be embarking on for almost a full month, but it's also helpful to making sure the process goes smoothly too. "
It Sucks -- Avoid It at All Costs
"Funding is not a milestone or endpoint -- it should be thought of as a necessary evil. It takes a ton of time; whatever timeline you have in your head, double it. If you're not being told "no" on a daily basis, you're not working hard enough. Also, remember that while it's their money, it's your company. You're looking for the right fit -- not the first offer."
Be Ready to Share
"Many first-time entrepreneurs and those raising capital for the first time get stuck on how much they would have to share. Instead, they should be thinking how big the pie can grow when equipped with the right connections and funding from the investors. So get this straight -- a small share in a bigger pie is larger than a bigger portion out of small pie. And it's worth sharing."
Not All Money Is the Right Money
"It's important to get in bed with the right investors for your project. As you push your venture forward, the excitement will ebb and flow -- as will revenue -- so you need to have investors that are there for the right reasons. That's why selling your vision is so important. If you don't have the right investors, it's like marrying for money and ending up bankrupt -- it ain't gonna work!"
"It took us over six months to close our angel round. Start raising before you actually need the money: meet investors at events, stay in touch with them by sending them a newsletter about your progress, and establish validation to raise your valuation. If you start raising money once you're almost out of money, then it's way too late."
It's Difficult in Many Ways
"I heard from everyone that raising money takes time and makes you lose focus on growing your business, but I didn't really listen. But it is hard, time-consuming, stressful and distracting. I wish I had started to raise money earlier in both companies so that when I did lose focus on the product, it would have been at a less critical time."
Professional Advice Is Necessary
"I used to think valuation was everything. Get a large "pre" number and I would be worth lots of money, so I thought. The professionals that put term sheets together have plenty of experiencing in making money -- for themselves. Get someone to help you understand the various exit scenarios that can show you how the waterfall of money works. Avoid the sneaky scenarios that VCs put in term sheets."
The Young Entrepreneur Council (YEC) is an invite-only nonprofit organization comprised of the world's most promising young entrepreneurs. The YEC leads #FixYoungAmerica, a solutions-based movement that aims to end youth unemployment and put young Americans back to work.