Now is a great time to be unfundable
bryce.vc
bryce.vc
However, I still believe that seed funding is important to most startups for the simple fact that if you have to worry about paying for groceries and food, you're not going to be able to focus 100% on your startup.
A 30k - 150k seed round could go a long way for most startups and I think is almost required just to get the basics covered.
The most valuable asset you can build is a resilient founding team. Facing important problems while still building your product is good practice for what happens when a company grows. Not being able to focus 100% on all important aspects of your startup is a good situation to gain experience with.
Another upside to not having funding is it forces you to seek economical ways to grow your userbase. I'm focusing on this intensely now. There are a lot of things my users would like, but I'm picking the ones that help them show my service to others.
I've encountered a handful of companies that (claim to) have multi million dollar contracts on the table that they need $500k-$1m to execute on and can throw that off in the first year's profit. I'm intensely surprised there isn't more of a factoring type solution that provides asset-backed contract-backed warrant-sweetened lending at credit card like rates. Sort of an alternative asset class to the Series A/B raises.
In fact, if anyone out there wants to put $3-5M to work that way I bet I can matchmake you with five companies in a month.
(Revenueloan and On Deck Capital are the right ballpark, but don't count. Revenueloan only wants to talk to you when you already have three big deals and want capital to spin up your fourth, and On Deck is looking to do loans an order of magnitude smaller.)
We have since gone through 3 major pivots (possibly 4, depending on how you split it). One of them was to consult in order to bootstrap -- something through which we've learned a lot about our customers. 2 of them were pretty big changes to our core business.
Interestingly, our original concept is still the long term goal. Hearing "no" from investors just made us realize that we need to build certain foundations before we can build our mansion of a company. This is likely a consequence of us being overly ambitious at the start of the project.
the impetus for this one was a series of conversations with entrepreneurs who said they were glad we hadn't funded them when they initially approached us. In retrospect, they felt that funding the wrong direction for them would have validated their bad idea and reenforced their belief that it was worth pursing. The push back ended up forcing them to really think about where to spend their time and limited resources.
The other conversations have been with entrepreneurs and founders expressing concern that its too easy to raise seed funding right now. That there's a growing sense of entitlement and arrogance particularly in the bay area. That half baked ideas aren't getting push back; rather, they're getting validated and compounding the entitlement problem.
No one knows how all of this is going to play out over the long aul. Just trying to lend a little perspective to those going through their own fundraising process.