Can funding too early on actually slow you down?

You may be scratching your head with this title but hear me out: if you’re just starting your business or in an early growth phase, throwing too much money into the mix may not be the best thing to do. Many people think what’s slowing them down is lack of funding but actually the opposite can be true if you recognize the gift that’s before you and shift your thinking accordingly. Here are some reasons why. If you realize any of these could be true for you, perhaps take the money out of the equation to gain new perspective.

Here are some issues that I’ve seen crop up with those who had access to unlimited funding early on:

1. The people on your team may be more interested in a paycheck than your vision.
Oprah says it best “everyone would like to ride in the limo with you but you really want people who would also ride the bus with you too.” It’s easier to see who’s in it for the money or the dream when times are lean. Surround yourself with these people early on when it’s easier to make the distinctions.


2. Rushing into production before “selling” your concept.
When funds are limited, you’re inclined to do more testing with your product or service to see if this is what your market REALLY wants. I’ve seen way too many people invest too much early on into production without properly understanding their markets only to have to go back to the drawing board over and over again. The saying “measure twice, cut once” applies here.

3. Lack of validation for your concept.
The business planning process is the best way to sketch out your core business model for others to see and improve upon and to “dry test” in the market BEFORE launching. What are your primary revenue streams, who are your customers, exactly HOW will your get your product or service in their hands and how much will this cost? Those with unlimited funds often skip the planning and testing part and get into the DOING part sooner than later which can prove costly.

4. Managing too much initial growth.
I’m all for planning and thinking big but there’s nothing wrong with taking small steady steps to achieve your goals. You want to manage growth by focusing on 1-2 core revenue streams at a time, creating systems, structure and scalability so that you can become unstoppable. Throwing funds at a situation for rapid growth does not ensure success. Creating the proper infrastructure, having a product customers really want and topping that with a great sales and marketing plan does foster success.


5. Loss of creativity and innovation.
Some of our greatest solutions are derived when we’re under pressure, have limited resources and must improvise, or have naysayers telling us it can’t be done. Has that ever happened to you? This is precisely the moment when we create that “entrepreneur’s magic” and become the “MacGyver” of our business. Conditions must be ripe for it and I’ve found that type of innovation and creativity doesn’t have as often when there are unlimited resources at our disposal.

6. Less apt to seek out guidance
I notice that people that have limited funds are more likely to actively and creatively seek out support and ask lots of questions. And there are plenty of people who will graciously and truthfully answer your questions if you should ask! I have found that if you are paying all your advisors, they are less likely to be truly forthcoming with their opinions for fear of losing their paid engagement.

So next time you think “if only I had the money” perhaps be grateful at that moment for the opportunity to really test the merits of your idea and to enroll people in your vision, not just a paycheck.

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