Why Raising 1M$ ain't all that

Came here to share some thoughts from beyond the fundraising veil, and hopefully see what the rest of the more experienced founders here think!

It took me two years of bootstrapping to raise my first ONE MilLiOn dOlLaRs.

It’s not hyperbole to say that a few years before that I would have very likely given up my pinky finger to have that amount of capital to deploy at a project I believe in. I had always felt that sum to be a Looney Tunes amount of money.

Let me tell you, the high was unbelievable. We had worked our asses off non stop, filled to the brim with self-doubt, getting into debt, and almost going bankrupt (a startup cliche that still makes us cringe to mention), and were finally given what we needed most. A financial lifeline, and perhaps more importantly at the time - a vote of confidence from someone else.

Technically we were aiming for 2 million, but that didn’t seem to matter any more. We excitedly sat down and re-organized the budget:

We’re a small team working at below market wage. Add some expenses here, throw in fees there, assume such and such marketing spend increasing per month by so and so, bla bla bla, crunch the numbers and voilla - 12 months of runway working pretty much as we already are.

Suddenly that didn’t sound like very much. Gulps and Ruh-roh’s all around.

Don’t get me wrong - this is a very good thing for founders, but as this new understanding was dawning on us, we were being constantly bombarded with the opposite perspective as our friends from outside the industry heard the news. One by one they’d lose their minds: “1 MILLION dollars?!” they’d exclaim wide-eyed. “That’s SO MUCH! You guys have practically made it!”

But suddenly, all us founders could think about were our “labour months”. We basically got 12 units of labour months. That’s what 1 million dollars is.

It’s a yearly budget that you get to have in the bank all at once, but then gradually spend at yourself and a few others at below market rate while working the entirety of your ass off for a <1% chance of any meaningful upside.

Again - this is VERY GOOD. I’m not scoffing at this at all. But it’s as if over the course of a week we suddenly became grizzled old veterans, too wise and disillusioned to fall for cheap capitalist tricks any longer, such as 7 silly zeroes in a row in a bank.

We accept our new labour months with stolid contentment and relief, and get back to work, and have even raised another round since - but high just isn't the same. We can't unsee our funding as labour months.

I was wondering what all of you here who managed to raise think about this (and hopefully this'll be useful for a few of you who are on your way there!). You can also check out the more emotional aspects behind everything if it interests you!