Common Founder Issue
I often hear founders discuss whether or not a certain business is “VC fundable” or “should we raise $250k or $1M?” What I’ve learned is that businesses and management teams are going to do what they do and financing strategy follows the operational results that happen as they execute their plans.

In other words, I’d encourage founders to think much more about (a) the type of business they are starting and (b) the traction metrics that they are seeing before ever thinking about personal/friends/family/angel/seed/VC financing strategies. In this podcast this topic is discussed by the Managing Director of one of the largest and most active angel group in the Midwest.

Here's how I think about the order...

Step #1 - The business. This includes business model, vision, market, tactical plans, founder goals, etc. This is the foundation.

Step #2 - What traction are you seeing? This is not just financial...customer engagement metrics matter even more.

Step #3 - Based on #1 & #2, how should this business be financed?

In Atlanta what I see most often missed is #2. Customer engagement metrics (ie traction) drive all other decisions (including how to finance the business).

Context
At this point in the podcast, Peter is giving an overview of Hyde Park Angels and how founders should think about initially raising money.

Get Right To The Point
I’d recommend listening to this entire podcast, but to get right to the point go to minute 5:39 of this podcast.

If this particular lesson resonated with you, please pass it along to one other person who you think it might help. Also subscribe on the homepage to receive each new lesson via email when I post them (once or twice a week).

Thanks to these folks for helping us all learn faster
Peter Wilkins (@Peter_Wilkins) of Hyde Park Angels (@hydeparkangels)
Rocketship.fm (@RocketshipFM)
Michael Sacca (@michaelsacca)
Joelle Goldman (@JoelleGoldman)
Matt Goldman (@SDMattG)

Please let me and others know what you think about this topic
Email me privately at dave@switchyards.com or let's discuss publicly at @davempayne.