Recently, I find myself in too many discussions with founders about their fundraising. On the surface, there is obviously nothing wrong with that. What disturbs me though is how often the conversation starts with:

The moment you focus your energy away from building kick-ass products to pleasing an investor, you set yourself up for failure. Tweet This Quote

“What do we need to do to be an investable startup?” or, “How can we tweak our product so that investors will pour money into it?”

The very premise of these questions is wrong—fundamentally wrong. It’s backward to believe raising money is the thing and not just something you do to get to the thing.

Investors want to invest in founders who are building exceptional products and creating a lot of value for their customers. That’s the only way to build something big and lasting. The moment you focus your energy away from building kick-ass products to pleasing an investor, you set yourself up for failure.

Pour every ounce of energy into creating value for your customers. Solve their problems and you will be golden. Tweet This Quote

Even if you find an investor who falls for the Wizard of Oz charade, you now focus on the wrong target group (since your investor is typically not your customer), build the wrong product, and look at the wrong KPIs.

Instead, understand that money is just the enabler to do what you want to do. Focus on building the most kick-ass product you can. Pour every ounce of energy into creating value for your customers. Solve their problems, and you will be golden.


This originally appeared on Pascal’s blog.

About the author

Pascal Finette

Pascal Finette

Pascal is the Managing Director of Singularity University's Startup Lab. He is also an entrepreneur, coach, and speaker who has worked in Internet powerhouses, such as eBay, Mozilla, and Google, and Venture Capital—starting both a VC firm and accelerator program.

  • Jamie Valentine

    Thank you for this advice. I am new to the concept of a social business and money is something that stresses me to think about. You are right that if you try only to get money, you will design a product for the investor and not according to your true mission.

  • Ashley White

    I think this was an absolute necessary read. So many times entrepreneurs get caught up in the ROI and when they’re going to make a profit. The original idea of the business is put in a back seat to making money. I liked the quote, “The moment you focus your energy away from building kick-ass products to pleasing an investor, you set yourself up for failure.” Remembering why you got in the business in the first place will only drive more success. When you have EARNED your success, investors will come. Great article.

  • Sarah

    This is a really important article. Our society now teaches us that money is of critical importance (much more than it should). Everywhere we turn we see crazy consumerism and are consciously and unconsciously trained that money equates to happiness and success. When we think about social ventures, it’s all too easy to get wrapped up in the ‘where will my funding come from?’ question, however legitimate it may be. This leaves the door wide open to forgetting about the real reason behind the venture.

    I think the key must be to balance the importance of finance and funding with intent and the quality of the idea/program/product we are creating. I honestly don’t know how to find that balance and I think it likely changes based on who we are, what are values are, and what our idea is. What I do hope though is that we don’t become so scared of the financial question that we don’t continue to strive for success. Adaptability
    and agility appear to be two critical elements of business success, so I imagine that those should be replicated in the world of social ventures too.

  • Maria Alvarez

    This is such great insight! It also reminds me of a previous post which talked about knowing who your costumer was exactly. It is so easy to deviate our attention to others such as the investor or the purchaser while neglecting the target audience. Often people have a great vision but trying to find funding can cloud that, and compromise the product or mission.

  • shazi

    Pandering to investors seems like a risky business if it means you might end up with an inferior product/ service. I was checking out “BADASS” by Kathy Sierra, in it she talks about user experience being the most important consideration. Basically, it’s not about having the best product/ service, but about how awesome you can make people feel while using it. People want to feel awesome using products and investors want to feel awesome funding your vision, the validation part seems to get in the way of that.

  • Angelica Jackson

    I found this article interesting. When you have a start up it is hard to not want to focus on appealing to investors. But I agree with this article you must focus on your target audience first, which is your customers. And that within its self will appeal to investors.