What if your job board got funding?

Job board fundingIf you read my month­ly news roundup (and if you don’t, you should!), you have prob­a­bly noticed much of the con­tent cov­ers com­pa­nies get­ting fund­ing. Why? Well, for one thing, big (or even mod­er­ate) mon­ey is inter­est­ing. Fund­ing can also tell you some­thing about which types of job boards and are seen as hav­ing the poten­tial to grow sub­stan­tial­ly. Fund­ing can also serve as a recog­ni­tion of suc­cess (‘that com­pa­ny did great with the ini­tial round, let’s them some more’). And some­times, well, it just means that the com­pa­ny has a ‘pitch team’ and/or good con­nec­tions in the VC world.

The real­i­ty is, most job boards and recruit­ing sites don’t ask for or get fund­ing. They are ‘-fund­ed’. They start, they , they grow. Or not. I think most founders whose com­pa­nies do get fund­ed are doing so for a cou­ple of rea­sons: a) they want to accel­er­ate their growth; and b) they are will­ing to give up some or most of their own­er­ship in exchange for a quick(er) exit. (Yes, there are oth­er rea­sons, but these seem to be the most typ­i­cal that I’ve run into).

But…

What if you did get fund­ing? What would you do with it? And why? I would posit that this is a use­ful exer­cise to go through – it makes you think about where your job is going, and why. Many times the lack of mon­ey isn’t nec­es­sar­i­ly linked to a lack of progress toward goals. Instead, it may be an absence of goals.

So let’s think this through. For the sake of this exer­cise, assume that you’ve just received an amount of fund­ing equal to the gross income you expect for the cur­rent year. So if you’re gen­er­at­ing $5M in sales, you’ll receive $5M in fund­ing. Also assume that in return, you will give up 25% of your own­er­ship in the busi­ness. You still con­trol the busi­ness, but not com­plete­ly. What are you going to do?

  1. Go hog wild on mar­ket­ing: If you at what most com­pa­nies say when they get a fund­ing round, they will say ‘spend on mar­ket­ing to increase mar­ket share’. In oth­er words, spend to grow. Is that what you’d do? Or….
  2. Invest in new product(s): Maybe you’ve got a great idea that has nev­er tak­en flight because you could­n’t invest in it. Or per­haps there is a prod­uct that’s ‘half-built’. Or would you rather…
  3. Acquire new staff: You can have your cake and eat it too if you hire new sales staff – you’ll grow sales AND you’ll get big­ger – prob­a­bly. Or maybe you’ll pick up some super-smart devel­op­ers who will wean you away from your cur­rent ‘off the shelf’ sys­tems. Or…
  4. Acquire a com­peti­tor: Quit com­pet­ing with them and instead, take them out of the mar­ket! If you’re lucky, you’ll pick up mar­ket share AND top notch staff. Or…
  5. Retire debt: OK, I don’t hear this too often. I guess it’s the­o­ret­i­cal­ly pos­si­ble. But swap­ping debt for own­er­ship? Well, it hap­pens.

So which one did you pick? Why? Now take your new­found knowledge….and do it any­way! If you’ve been hold­ing off on mar­ket­ing, cut back in some oth­er areas and use the mon­ey to dri­ve sales – the lack of lots of mon­ey usu­al­ly makes your spend­ing more tar­get­ed and care­ful. Or – don’t leave that new prod­uct on the shelf – get it done! Sell it! And so on.

Sure, you can’t do these things the same way as if you had lots of some­one else’s mon­ey – but most of the time you can still reach your goal. You’ll just have to get seri­ous about actu­al­ly achiev­ing the goal. Do what’s most impor­tant, and don’t wor­ry about the rest of it.

And yes – you’ll get to make more mon­ey and keep your com­pa­ny!

Note: The above is from a 2019 post that is still – for­tu­nate­ly – quite rel­e­vant. I hope you’ve enjoyed it!

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