SAY NO

Last year, we had released a post on saying no. Here’s an update to that. Specifically on when to say no to funding and when to say no to money.

Investments are like romantic relationships. They can help you when things get tough or put you in an even tougher position. An investor who doesn’t share your vision and dream for your company will become an obstacle to your progress and a major source of frustration. Short term influx of cash is often tempting, however making sure that the investor’s temperament aligns with you is even more important for your business in the long run. At the same time, even If your vision aligns, what might occasionally happen is that you raise too much money. Over-promise and under-deliver. Understanding that every single cent that you take from your investor has to be accounted for and backed by results will keep you from getting greedy as too much of anything can also lead to disaster.

Another scenario is when you might have to say no to a customer. There is a 80/20 rule called the Pareto principle, which states that 80% of your output/results/sales comes from 20% of the sales and this is true even in your business. However, it is also important to understand the compounding and negative effects of this Pareto principle, which is that 4% of your customers (20% of 20%) consume 64% (80% of 80%) of your time and energy. It’s understandable that not everyone can afford to let go of customers, which is why it is important to diversify your customer base and have the power and freedom to choose your customers when you can afford it.

#CieraAdvisors #investmentbanking #venturecapital #corporatefinance #startups #business #SAYNO #vision #dream #Paretoprinciple