Money 2.0 Stuff: Pot committed

The reality is that most startups won’t get too far along the fundraising path without a business model. If you walk into a fundraising meeting with a venture capitalist and they ask you how you’re going to make money and, implicitly, how you’re going to make them money, and you respond with “hmmm, I don’t know, actually, but that’s a really good question!” then it just makes things a bit difficult and awkward.

I imagine that the scenario described above probably doesn’t actually play out too frequently. For one, there are a lot of existing businesses to take inspiration from. Ride-sharing? Skim some percentage of each fare, price gouge at peak hours. Media? Charge users a subscription, host adverts. E-commerce? Commission on each sale, featured listings. In the event there is no precedent, most teams can and will just, like, make a business model up. Startups are dynamic, things change, excuses can be made down the line. After some fantastic user feedback we’ve decided to pivot, that’s fine. Just make sure you have some faintly viable plan when you take that first meeting.