{"id":32569,"date":"2023-10-20T14:28:24","date_gmt":"2023-10-20T14:28:24","guid":{"rendered":"http:\/\/startupsmart.test\/2023\/10\/20\/freelancers-matt-barrie-talks-horse-sense-about-selling-investment-and-investors-startupsmart\/"},"modified":"2023-10-20T14:28:24","modified_gmt":"2023-10-20T14:28:24","slug":"freelancers-matt-barrie-talks-horse-sense-about-selling-investment-and-investors-startupsmart","status":"publish","type":"post","link":"https:\/\/www.startupsmart.com.au\/uncategorized\/freelancers-matt-barrie-talks-horse-sense-about-selling-investment-and-investors-startupsmart\/","title":{"rendered":"Freelancer\u2019s Matt Barrie talks horse sense about selling, investment and investors &#8211; StartupSmart"},"content":{"rendered":"<div class=\"td-post-featured-image\"><img loading=\"lazy\" decoding=\"async\" width=\"445\" height=\"352\" itemprop=\"image\" class=\"entry-thumb\" src=\"\/wp-content\/uploads\/2013\/09\/l_matt-barrie-445.jpg\" alt=\"\" title=\"l_matt-barrie-445\"\/><\/div>\n<p>\u00a0<\/p>\n<p>Startup founders saying they have to raise money before they start selling a product is \u201cabsolute horse shit\u201d, Freelancer CEO Matt Barrie says, and funding from venture capitalists should be avoided wherever possible<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p>Speaking at SydStart, Barrie says these startups need to be focusing on actually becoming profitable rather than looking to VCs for funding to keep the business going<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p>\u201cA lot of people say they can\u2019t get going until they raise some money. That\u2019s absolute horse shit,\u201d he says.<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p>\u201cA friendly venture capitalist is not the solution to all your problems. You are the solution to all your problems.\u201d<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p>Freelancer only sought one round of funding before publicly listing on the ASX, and Barrie says startups shouldn\u2019t set out to seek venture capital.<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p>But if they do, he says there are a number of things they need to do to ensure they don\u2019t get \u201cscrewed over\u201d.<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p><b>Don\u2019t raise too much money<\/b><\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p>\u201cRaise enough money to cross the Valley of Death,\u201d he says.<\/p>\n<p>\u00a0<\/p>\n<p>\u201cMake sure you raise enough money to get yourself to a demonstrably increased value of the company.<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p>\u201cBe careful that every dollar you raise you\u2019ll make a return on investment.\u201d<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p><b>Make sure the VCs have startup experienced<\/b><\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p>Founders need to look into the investors\u2019 history and backstory to make sure they actually know what they\u2019re talking about, and have experience in a similar field, Barrie says.<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p>\u201cOnly operators of business will understand to not get too excited if you have success or too upset if something goes wrong.<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p>\u201cThink from the investor\u2019s perspective. You need to get the right type of investor.\u201d<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p><b>Cover all your bases<\/b><\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p>Entrepreneurs also need to make sure they shop around all investors and don\u2019t jump at the first sign of cash, Barrie says.<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p>\u201cIf you\u2019re out there raising money, you need to shop till you drop,\u201d he says.<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p>\u201cIf you only get two term sheets for your deal, you will get screwed.<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p>\u201cMost startups find the first person that shows any interest and focus all their energy on them. That\u2019s a big mistake.\u201d<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p><b>Read everything<\/b><\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p>Although founders will often be handed a novel-size book of documentation when securing VC investment, they need to read through all this information and make sure they understand it all.<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p>\u201cRead and understand every single one of the documentations, or you could lose control,\u201d Barrie says.<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p>\u201cIf you lose control of your board, you lose control of your business.\u201d<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p><b>Keep everything lean<\/b><\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p>Barrie says he often sees startups overcomplicating things by getting too many people on their board, too soon.<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p>\u201cYou do not need 17 people on a board for a company that\u2019s making no money,\u201d he says.<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p>\u201cThe best number for a startup board is three.\u201d<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p>He adds that a board should always be an odd number to make things a bit easier for those difficult decisions.<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p>If it all possible, startups should follow in Freelancer\u2019s footsteps as raise as little VC as they can, Barrie says.<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p>\u201cDo not raise money from VCs, sell something to customers as quickly as possible,\u201d he says.<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<p><i>Do you know more on this story or have a tip of your own? Raising capital or launching a startup? Let us know. Follow StartupSmart on <\/i><a href=\"https:\/\/www.facebook.com\/StartUpSmart\" target=\"_blank\" rel=\"noopener\"><i>Facebook<\/i><\/a><i>, <\/i><a href=\"https:\/\/twitter.com\/startupsmartnow\" target=\"_blank\" rel=\"noopener\"><i>Twitter<\/i><\/a><i>, and <\/i><a href=\"https:\/\/www.linkedin.com\/company\/startupsmart\" target=\"_blank\" rel=\"noopener\"><i>LinkedIn<\/i><\/a><i>.<\/i><\/p>\n","protected":false},"excerpt":{"rendered":"<p>\u00a0 Startup founders saying they have to raise money before they start selling a product is \u201cabsolute horse shit\u201d, Freelancer<\/p>\n","protected":false},"author":2,"featured_media":62569,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/32569"}],"collection":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/comments?post=32569"}],"version-history":[{"count":0,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/32569\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media\/62569"}],"wp:attachment":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media?parent=32569"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/categories?post=32569"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/tags?post=32569"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}