I’ve met with three exciting early stage technology companies this week which have become stalled through stop-start funding, or are about to become stalled.
We’re not doing it right.
Projects and capital are seeking to engage too late and in the wrong mindset and, when they do engage, they frequently do so with dangerously vague and destructively divergent objectives.
There’s R&D and there’s execution. There’s market research and there’s development and there’s roll out. There’s blue skies and there’s commercialisation. There’s early stage customer connection, customer acquisition and aggressive marketplace landgrab.
In fact, there are many more terms for many more logical business growth activities. Investment, however, is far too often only vaguely mapped to such stages.
At the moment far too much inherently fine technology is trying to grope into the light, fumbling around to find whatever funding it can.
A burst of activity……a slug of funding; another push…….another dash around to find another desperate slurp of cash to refresh the exhausted effort. Where is the mastery and the momentum in any of that? Where is the verve and panache that inspires funders, staff and customers?
At Funding Enterprise we seek Point to Point Funding: this is matching investment to clear, staged outputs. If it cannot be done with conviction and clarity, then the activity itself is probably not sufficiently ripe to be married to investment.
It may be the case that something that is purportedly market roll-out ready may need to be folded back into an academic-housed R&D project. It may more simply be that the idea has been exposed in this way as too altogether too flaky.
The flipside of Point to Point Funding is Point to Nowhere Funding, where investment is woefully under-mapped to expectations and execution.
Whatever, unless applications for investment are a much closer marriage of great (and, crucially, staged) ideas and there is an overall commitment to Integral Strategic Funding, too many bad projects will continue to get funding, too much Point to Nowhere Funding of potentially good projects will continue, and too many really great projects will be hampered by insufficient funding, or may even fail to fund at all.
It’s too loose all round.
We need Integral Strategic Funding. This takes the focus of the funding debate away from the habitual hyperbole of the business founder. It also decentres the habitual minimalism of the funding providers in terms of candid information flow, investment quantum and committed ongoing loyalty.
Integral Strategic Funding places the focus on value creation, which is the only place that in fact really matters to both investee and investor, but which is traditionally under-represented in superficial and adversarial funding relationships.
Those seeking funding need to get totally real and raise their planning game to develop a much fiercer objectivity around their own activities. Funders need to stop thinking about “taking a punt” on projects: they must sign-up to a strong Integral Strategic Funding approach, which will in turn maximise their own ultimate returns.
Only by seeking to make investees and investors perform as contracted and mutually aligned parties to a single value creation project can we start to do justice to our talent, our ideas and our capital.