Biem, a butter spray company, secured a $500,000 deal from Lori Greiner on Shark Tank. Sounds like a big win, right?
Well… not exactly!
The final product didn’t meet expectations and the business burned through cash too fast. In the end, they failed—after having all the funding they needed.
Takeaway? Funding isn’t the only solution for success. If the foundation isn’t strong, no amount of money will fix it.
So before chasing investors, it’s important to know when to skip funding:
If you don’t actually need the money
Let’s start with the big one—feeling FOMO when everyone around you is raising money is easy.
You scroll through LinkedIn, see startups celebrating funding rounds, posting about “scaling fast,” and suddenly, you feel like, “Should I be doing this too?”
But the real question is: Do you really need it?
If your business is already bringing in enough money to cover expenses and fuel growth, why take on the stress of investors? Why give up ownership if you don’t have to?
Raise money because you actually need it—not because everyone else is doing it.
If you’re still testing and experimenting
Raising money early on isn’t the right move.
Investors don’t just fund ideas. They fund businesses with a clear, well-defined plan.
- How will you grow?
- How will you make more money?
- How will they get their return?
If you’re still in the testing phase, finding the right business model, figuring out your market, or adjusting your strategy—then getting money too soon could only force you into a path that might not even be right.
Instead, focus on this stage to validate, refine, and iterate. Once you’ve got a solid strategy and are confident in what you’re building, try securing funding.
If you’re not ready for expansion
Funding isn’t free money! Investors give you money because they want results. They expect—faster growth, bigger goals, and an effective plan to get their money back.
They even assume you’ll use the capital wisely to increase revenue and create value.
But if you don’t have a plan for funds or your business isn’t ready to grow, that money just sits idle in the bank, serving no real purpose—that’s a missed opportunity and a red flag for investors.
So, ask yourself a few questions before you consider raising money:
👉 Do I have a clear strategy for using this money right away?
👉 Will this funding directly contribute to business growth?
👉 Are my operations, team, and systems ready to scale?
If the answer isn’t clear, then raising funding now will only set you up for failure.
If you’re not sure about your long-term vision
Not sure where your business is going in the long-term?
Then it’s probably not the right time to bring in investors and better to hold off on seeking funding.
If you don’t have a long-term plan, you might end up attracting the wrong investors, making rushed decisions, or scaling in a direction that doesn’t even align with where you want to go.
So take a step back. Take your time and build a strong business first.
When you have a strong foundation, you don’t just raise money. But you attract the right investors who believe in your vision, not just the next big exit.
If investors’ goals don’t align with yours
Sounds obvious, right? Not all investors are the right fit!
In fact, investors have their own goals and objectives. They’re not giving you money out of generosity—they’re doing it because they find high-growth opportunities that can scale fast and help them make a good return on their investment.
That’s fine! But what if their vision doesn’t match yours? What if they’re focused on short-term gains while you’re thinking about long-term success? This can cause serious problems down the road—you’re in trouble.
Hence, choose your funding sources carefully. If their goals don’t align with yours, you’re better off without them.
If you don’t fully understand the funding terms
It’s easy to get caught up in the hype, but it can quickly turn into a mistake if you don’t know exactly what you’re agreeing to.
Funding terms like equity, dilution, and repayment plans can all affect your business in big ways. So, don’t take them lightly.
Without fully understanding these terms, you might end up giving up more than you want, getting stuck with tough conditions, or losing control to investors. Don’t make that mistake.
Before accepting any money, ensure you’re clear on the terms. Ask for legal advice, talk to other founders, and read the entire contract. The right funding will support your business, and not cause problems in the long run.
If your business can’t survive without funding
Here’s the truth: If your company doesn’t actually make money and just relies on the funding, you don’t have a business. You have a money-burning machine.
I’ve noticed companies raise money over and over without focusing on profitability. When the investors stopped funding, they fell apart.
A real business can stand on its own. It doesn’t need constant funding to stay alive. It generates revenue. It grows responsibly. It doesn’t rely on investor money as a crutch.
If you can’t survive without funding, work on that first. Funding should be for growth, not survival.
Final thoughts
Wrapping up! Funding can be great—but only if you truly need it. Doing it at the wrong time might hurt your business more than help.
So before you raise, be clear on why you need funding and what it will actually do for your business.
Because in the end, funding doesn’t make a business successful. The best business is the one that works—whether it’s funded or not.
