|
Posted on August 27, 2015 @ 10:41:00 AM by Paul Meagher
Timothy Faley, in The Entrepreneurial Arch (2015), has an interesting comment on funding milestones:
Investors will invest an amount of money to get you to the next significant milestone. Accomplishing milestones derisks your business, time does not. Never ask for funding solely for a specific period of time; always to pass a specific milestone. Of course, the milestone will be time-bound, but it is the passing the milestone that is important to the investor, not the passage of time (p. 156).
Another thing to keep in mind is that when you raise investment, the release of money associated with that "raise" will often be contingent upon reaching certain milestones in a certain amount of time. Funding may not simply be doled out according to the passage of time but the meeting of milestones in a timely manner.
While you may require a full capital amount to get a project where it needs to be, getting there may require achieving several milestones with the funding for the full amount being contingent upon meeting those milestones along the way. This is similar to the release of funds for building a house where the release is contingent upon certain building milestones being reached. Identifying good milestones with credible time and cost estimates is a good basis for working with investors.
|
Peace of Mind funding with Purpose 
