Do You Really Need an Investor?

Use this before preparing a deck or making an investor list. The purpose is not to prove that fundraising is wrong. It is to define what the company gains and what the founders accept in return.

1. Return to the reason for building

Write down why you started the company.

• independence;
• solving a particular problem;
• building a large organisation;
• financial outcome;
• working with specific people;
• another personal or market objective.

If independence is central, acknowledge that an investor introduces shared ownership, reporting, and influence over important decisions.

2. Name the milestone

Complete this sentence:

We need external capital to move the company from ___ to ___.

The second blank should describe an observable change, not “growth” or “more runway.” Examples include completing a regulated product, launching in a defined market, or reaching a product milestone that requires a team the company cannot yet finance.

3. Calculate the smallest useful amount

Estimate:

• the direct cost of reaching the milestone;
• operating costs during that period;
• a realistic contingency;
• revenue or customer financing expected during the same period.

The goal is not to raise the largest amount available. It is to understand the smallest amount that responsibly changes the company’s position.

4. List the alternatives

Consider whether the milestone can be financed by:

• founder income or savings;
• customer prepayment;
• presales;
• family and friends;
• crowdfunding;
• grants;
• debt;
• a business angel;
• venture capital.

Different sources create different obligations. Compare control, repayment, time, risk, and the support each source can provide.

5. Describe the relationship you are accepting

Write down:

• what you will report;
• which decisions will require consultation or consent;
• what ownership you may give up;
• what return the investor expects;
• how the investor eventually expects liquidity.

Decision

Raise when the opportunity requires capital, the milestone is clear, alternatives are weaker, and the ownership relationship fits the founders’ goals.

Wait when the use of funds is vague, the amount is based on status rather than need, or the company can create materially better evidence before selling ownership.

---

Source: adapted and translated from chapters III and IV of the Polish original Anioł w Piekle (2021).