Building a company is like building a house, you need a vision of the final outcome but, to get there, you need a plan and construction is done brick by brick. Building a company is much the same, you need a plan but you also have to build it step by step and keeping focus on these three elements is critical to success. The Foundry Exchange deals with some aspects of this process including forming a company, integrating with and benefiting from the innovation ecosystem, fund raising and building and running boards.
Founding and running a company is a complex task made possible by understanding the small steps that combine to build the vision.
Most founders fail to to understand which steps comprise the critical path and the best timing of each step, the result is usually a higher burn rate and greater than necessary funding requirements, this in turn, usually results in greater dilution for the founders. Steps on the critical path usually include:
- proper preparation for fund raising
- understanding the market environment for your product or service
- developing a viable product before investing in sales and marketing
- achieving key validation points ( relevant investors, executive team, product shipping, cash flow, repeat customers, cash positive etc)
Minimising founder dilution is about understanding these steps and matching fund raising efforts with the maturity of the company. Investors are always looking for more validation, by having a critical path plan you can offset some of these demands and demonstrate a clear plan.
