The problem can be boiled down to one tired axiom: time is money. Crafting a pitch, travelling to investors or pitch competitions, negotiating contracts--all of these activities take time that fledgling founders simply don’t have. Read any thought-piece on fundraising, and you’ll come across the same warning; crafting a successful pitch generally takes six months or more, and during that time you are bound to be mentally, and at times geographically, distant from your employees and the day-to-day operations of your company. If, as an early stage company, you and a few other founders constitute your entire employee base, and your day-to-day operations are the logistics of getting your company off the ground, you can see why such absences might be an issue. If you’ve yet to build a minimal viable product, losing this time is even more unwise.

And we have news for those who would argue that VC funding is an acceptable substitute for product validation. Funding doesn’t guarantee the success of your product, because investors are gambling, same as you. Early-stage investors—particularly accredited early stage investors—create diverse portfolios of high-risk companies expecting that some will succeed and others fail; your company could fall into either category, and they know it.

As Fred Wilson once said, "I assume an early stage venture fund will lose money on 1/3 of its investments, breakeven to make a little bit on 1/3 of its investments, and will make good money (5-10x) on only 1/3 of its investments." The only sure way to edge yourself into one of Wilson’s latter categories is to demonstrate traction and a promising trajectory, both of which are near impossible without a MVP and demonstrable product/market fit.

If you’re still unconvinced, consider this; companies entering Y combinator, one of the most prolific early-stage investors in Q3 2018, generate on average $1,000/mo in customer revenue. The only way to gain comparable customer revenue is, of course, to have a marketable product.

Ryan Smith, founder of Qualtrics, outlined additional reasons to avoid VC funding in an interview with Inc. Firstly, he reminds, VC funding is essentially a mortgage rife with long-term obligations and expectations. VC’s generally receive a 2% annual fee based on committed capital as well as 20% of any investment profits (which are usually collected during the company’s exit). The problem is, it is more difficult for companies to exit than ever before. "There are about 11 buyers out there that could digest a billion-dollar company, and they're not buying," Smith says. With this latter source of funding unattainable in the short-term, the surest way for VCs to make money is to push their portfolio companies to succeed, thus creating opportunities for new valuations and investment markups. This push, however, can have a negative effect on unprepared companies, pressuring them into unsustainable burn rates that imminently lead to burnout. Though not ideal for the VCs involved, failure is ultimately better than stagnation, because the sooner a portfolio company fails, the sooner it can be replaced with a new prospect.

So if VC funding is inadvisable, what are the alternatives? Bootstrapping or operating a lean startup may be the way to go. Both strategies are respected precisely because they entail building and validating a product first, and raising funds only once ready to scale. In addition to generating tangible traction, bootstrapping entrepreneurs develop mental stamina and real-world know-how. What’s more, they avoid the perils of ownership dilution and public pivots.

Of course, bootstrapping has its own difficulties, but many of these only serve to strengthen that aforementioned stamina. For example, even without the distraction of hunting for investors, bootstrapping entrepreneurs will likely struggle to find enough of that crucial and precious resource, time. But, having eschewed the pressures that come with VC funding, bootstrapping entrepreneurs can harness this scarcity and use it as incentive to execute only those activities that will provide maximum returns. Those who are skeptical of this approach might want to take a look at these fifty famous bootstrapped companies.

That is not to say that you shouldn’t approach investors during the early days of your company. Networking and nurturing relationships with those who might be able to help you in the future is always advisable; however, just because you are in contact, it doesn’t mean you must immediately present your ask. As LANDR CEO Pascal Pilon expressed during his panel at the Fundica Roadshow, noncommitted investors may be able to provide informal advisement, helping you identify and plug the holes in your deck or pitch. If you can execute the changes they want to see before any money is on the table, you will only seem more reliable and committed when the time comes to ask for funds.

If you do decide to fundraise in spite of the above perils, raise only what you need. Or, even better, raise when you don’t need anything at all. Excess cash encourages exorbitant spending and unsustainable burn rates. And, in addition to precluding acts of desperation, such as partnering with VCs that aren’t a good fit for your company or agreeing to unfavourable terms, raising when you already have cash in the bank allows you to focus new funds on scaling rather than crucial operations that will suffer as soon as said funds are drained.

Regardless of whether you bootstrap or immediately turn to VCs, growing your company requires strategy, foresight, and a little bit of luck. And, be it at the Fundica Roadshow or elsewhere, we hope your company cultivates all three.

To learn what other forms of funding may be available to your startup, visit fundica.com.