By: Michelle Simms, President & CEO, Genesis

If there’s one question I get from startup founders repeatedly it’s this: “How do I filter all of the advice I’m being given?”

It seems that everyone from program managers and government employees to mentors and investors have advice for startup founders. And, (this may be really hard to believe), they rarely all provide the same advice. This leaves founders confused and sometimes stuck in evaluation mode where they simply don’t know what to do or what decision to make.

One piece of advice that comes up frequently and has come up a few times recently with some of our companies is the whole debate around bootstrapping vs: securing investment to grow the company. A few weeks ago, I met with some founders who were lamenting about advice they had received from well-meaning individuals. They were told to go out and find an investor because investment would help them achieve success and it would show others that they were successful. One was even told that they would receive more government funding if they sought investment for their company.

But, what is success! It’s a relative term and by its very definition means ‘the accomplishment of an aim or purpose’.

I guess it’s true that if their aim or purpose was to secure investment and they did just that, then they would achieve success!

If I could be so bold as to give a piece of advice to the ‘advice givers’, it would be to ask founders to outline their business strategy for you. If the strategy (aim or purpose if you will) was to bootstrap the business for as long as they could to build up value, then that’s a great and potentially successful strategy. Think about the success of MailChimp for example, a company that bootstrapped its way to a $4B valuation. Additionally, not all companies are investable companies. If the company’s business model is not one where an investor sees an opportunity to get a return on their investment, then focusing on securing investment will be a waste of valuable time and resources for a founder. Time that would be better spent focusing on acquiring customers. If the company needed cash to move quickly to gain market share, hire talent or further develop the product, and they have a business model aligned with securing investment, then investment might form an important part of their strategy. Securing investment would help them achieve success in doing these things. A great example of a company who used investment as part of their strategy to grow is Verafin. Investment helped them to gain market share, acquire the needed talent and move quickly.

Entrepreneurs, you can help to lead these conversations by thinking about and elaborating on a few key things early in your journey (recognizing they may change, which is okay). Some things to consider are:

• 1) Articulate your purpose and passion for building the business

• 2) Build a plan around the type of company you want.

• 3) Clearly understand your market opportunity, its size and the speed at which you will need to move to acquire the market share you want.

• 4) Describe the resources you estimate you will need to grow the company based on where you think you need to go

Investment is a fantastic tool that can be used to help grow a company. Investors bring a wealth of learned experience, networks, access to other investments and financial instruments. But, if investment doesn’t form part of the strategy and it doesn’t make sense to do so, then we need to support our founders to grow their business with the strategy that makes sense for them and their business.

A healthy startup ecosystem exists when you have a mix of companies at all stages and levels of growth.

Founders deal with enough stress daily in running their businesses. Our job as advisors should be to ask the questions that get to the root of why they are building the company and what they want to get out of it. Once they have answers to these questions, the decision around whether they need to secure investment or not will become clear to them.