This is when to raise money
Is it easier to raise money or acquire other resources when you have zero revenue, zero customers, and zero traction?
The irony is that it is often easier to raise money or acquire other resources when you have zero revenue, zero customers, and zero traction than when you have a small amount.
By Eric Ries in his book The Lean Startup
First of all, quoting one line from this book does no justice. You'll be seeing a lot more than this one.
The irony lies in the fact that having nothing can sometimes spark more imagination and excitement among investors.
When a startup is just starting out, with a blank canvas and unlimited potential, the possibilities seem endless.
The absence of any existing numbers or figures allows for a level of creative thinking and vision that can be captivating.
However, once a startup starts to gain some traction and demonstrates initial growth, things can change.
Small number of traction raise questions about scalability and the potential for larger numbers to materialize.
They may scrutinize the growth trajectory and demand more concrete evidence of future success.
WeWork is one of the classic examples of overvaluation and how things fail when they just go with the founder's charisma.
On the other hand, it should be easy when someone says that we've made X amount of profit with Y number of customers and we need to expand and launch a few new features as well!
That should be the point every investor should love to hear. Sadly, it isn't.