Mistakes That You Need to Avoid in Managing Startup Investment Funds

Mistakes That You Need to Avoid in Managing Startup Investment Funds

The funding phase is a crucial momentum in a startup development strategy. How come? Although the responsibility is getting bigger because of investor intervention, on the other hand, you also get the much needed financial support to maximize your production potential. In addition, to find investors are not as easy as you think, you must prepare a mature strategy first before offering it to investors.

Whatever the number of funds received, the mistake of managing the finances will always remain lurking which could potentially endanger your startup growth. So what are the management mistakes experienced by startups out there? Here are some examples!

Assume funding as company income
One of the common mistakes is to consider investor funding as revenue for the company. In fact, fresh funds are actually a burden that you have to account in the future. This mindset has the potential to shift your focus away from the real purpose of developing a business that is growing and sustainable.

Begin to underestimate the burn rate for small things
Careful budget preparation is important to ensure that startups still have sufficient funds to continue operating. In the process, you can monitor and separate the amount of money coming in and the remaining capital that can be “burned” in the future. With such huge capital receipts from investors, there are times when a founder is lulled to underestimate the outgoing funds, even though the amount exceeds the initial budget. Expenditures that are considered small if this continues to accumulate can disrupt the company’s operations. In the end, it is difficult for the founders to account for the capital that investors have provided.

Unfocused marketing execution
Executing “marketing” marketing activities by the company’s core team is ideal for small startups, especially early in their growth. But along with the growing number of employees and marketing media you want to use, it is more effective to create several specialized marketing teams with a clear division of tasks. You can also utilize the employees and capital you receive to focus on product development.

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