Unscripted: Life, Liberty, and the Pursuit of Entrepreneurship pdfdrive com

Funding Propagation
In 2007, after I sold my company for the second time, the new owners moved
headquarters from Phoenix, Arizona, to a hot tech district in San Francisco. I’m
sure the rent increased by $30,000 per month, not to mention the cost of labor
and everything else from coffee to cubicles. Since I knew the inner workings of
my old company, I never understood this reasoning, other than wanting to “look
the part” of a technology company. I know Phoenix is not devoid of office space
and talented people who know code.
Anyhow, it felt like déjà vu. You see, the first time I sold the company nearly
six years earlier, the exact same thing happened: a fast move to San Francisco,
increased costs, and an increased visibility on things that don’t seem to matter. I
know foosball tables and free Pringles in the lunchroom are good for employee
morale, but you know what isn’t good for employee morale? Layoffs, pink slips,
and bankruptcy.
Sadly, years later, despite a different economy, a different team, and a
different vision, the outcome would be the same: bankruptcy. My point,
hopefully, is clear. 
Cash is king when it comes to propagation.
Every dollar should
go toward that effort. If it cannot grow the bottom line, it shouldn’t be done.
There’s a difference between a $4,000/month Class-B commercial lease in
Phoenix and a $50,000/month Class-A space in the San Francisco financial
district. Auxiliary expenditures, such as marble floors, custom-branded
mousepads, and that cool neon light of your logo, can wait. 
Preservation of cash
and its ultimate redirection into growth is the only thing that matters.
When cash is tight, propagating a company is impossible. More sales, traffic,
and users demand more resources. Every dime of revenue (and profits) should
be reinvested into the company to fund whatever growth challenges await.
Your role as CEO is not to fly from New York to Los Angeles in business
class. It is not a mahogany desk, but an Ikea desk that screams dorm-dweller. It is
not a salary increase with every incremental increase in revenue. There will be a
time and a place to reap rewards, but propagation isn’t it.
And lastly, my advice for growing companies is to reject funding unless
necessary. Why? Because funding typically shifts stakeholder priority from the
customer to the investors. If you can finance growth while maintaining 100
percent control over your business, do it.

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Another option is a different type of crowdfunding: equity crowdfunding.
Whereas reward/donation-based crowdfunding rewards contributors with
products or rewards, equity crowdfunding sells a piece of your company.
Websites like Circle-Up, Crowdfunder, and Fundable give you the opportunity
to actually secure equity financing, convertible notes, and other financing
options for your expansion. However, be warned: These services are best
deployed after concept proof and sales are growing. Equity crowdfunding is like
an online 
Shark Tank
: you don’t walk through the doors with zero sales, an idea,
and a dream.

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CHAPTER 41
MAKE EXECUTION MATTER:
13 BEST PRACTICES
Great marketing only makes a bad product fail faster.