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Your Startup Probably Doesn’t Need Funding – and Here’s Why



Andrew Gazdecki

Ever wished your teachers had taught you money skills?

As the proud father of a two-year-old boy, I hope one day to teach him how to manage money so he needn’t worry as much about it as I did when I first started earning. 

Your parents may have been very smart with their money — but years ago — parents didn’t talk about money. Parents used to believe that the school system covered the information about financial endeavors. Not so. You probably never learned what to do with your dollars until much later in life. Then, you’d earn the money and buy the stuff you liked, i.e., comics, books, music, food, and so on. We have all been there, done that.

The Proud Owners of a Startup

Today, as the proud owner of a startup, you’re probably much better at managing your money. You’ve survived the tough times to know what young people learn too late. But your biggest test of that financial insight is yet to come. Will you be ready?

Sometime in your future, an investor will offer you money in return for equity. You might even ask for it. While investors can seem like a solution to countless problems you encounter as a founder, don’t be too hasty to start eating from their hands. The cost of the money you receive may be more than you’re willing to give.

Investors Want a Quick Return

One, are you mentally and logistically prepared to accept funding? To delight your investors, you need to spend their money and earn them a return – fast. It might take the experience of growing and exiting two or even three startups before you know how to do that. 

Secondly, just how badly do you need that funding? In this article, you’ll learn how bootstrapping makes you a better business – a leaner, smarter, more agile company that can roll with the punches. Would you sacrifice those enduring advantages for a lump sum?

Hold All of Your Questions — You May Not Need Funding

Don’t answer just yet. Let’s take a deeper look at why your startup probably doesn’t need funding. Knowing what you give up in return for investor dollars could help you discern when to accept an investor’s offer and when to say no. 

Mo’ Money, Mo’ Problems

There’s a reason you don’t give a child your credit card. They don’t know how to make that money work for them and will instead succumb to impulses and instant gratification. Add a spending deadline into the mix and you might as well have set your money on fire. 

I had plenty of offers to fund my previous businesses. One in particular from a famous VC in Silicon Valley. I turned them down. Why? Because frankly, I was in my mid-twenties and didn’t have a clue what I’d do with the money. Pimp out my office? Hire a bunch of new staff? 

I wasn’t interested in that stuff. I cared about sustainable growth. Stacking costs early in your entrepreneurial career makes you vulnerable to failure. I wanted the freedom to fail and learn from my mistakes because I knew it would make me a better entrepreneur. 

Once Your Accept Funding — The Stakes Increase

But once you accept funding, the stakes increase. Your failures become your investors’ failures, and that’s a lot of pressure. The clock starts ticking as soon as the money lands in your account. You might have 18-24 months to scale before you run out of money and goodwill. 

Cards on the table, I raised funding for my latest business, MicroAcquire – a platform for acquiring and selling startups. I’ve built and sold three startups now and finally feel confident I know how to spend investor dollars. I’m not against funding in principle but raising it too soon.

Before you raise money for your startup, and I mean serious money, not a little seed or friends-and-family round, consider how you’ll spend it. If you can’t think of a strategy that results in growth and returns for your investors, you might as well not raise it in the first place. 

Who Ate All My Pie?

I bet you’ve courted a few investor offers. It’s a good feeling, isn’t it? Like validation. A growing, profitable startup smells like freshly-baked pie to an investor, and they might offer you an eye-watering sum for a slice. Your pie might be small now but in five years? Who knows. 

Only two things will happen to your startup in your lifetime: someone will acquire it or it’ll fail. I’ll assume you’re planning on the former. When your life-changing exit happens, do you want to take home the lion’s share of the proceeds? Then you need to retain the lion’s share of equity.

Bootstrapping Minimizes the Number of People Cashing in on Your Success.

Your employees and cofounders deserve their stakes since they’ve helped you scale to an exit. But – rightly or wrongly – you might feel differently when dividing funds between investors. 

The more people you grant equity to, the more complex your payday. Will your market-driven valuation still achieve your exit goals once everyone (including the taxman) takes home their slice? If you’re in a rush to sell, will your investors allow you to accept less than your valuation? 

Bootstrapped founders don’t have these concerns. You control the most equity, you decide when to sell, and you have greater room for negotiation (since you need please yourself and your staff only), increasing your buyer pool. That alone could be worth saying no to funding. 

Keep Others’ Hands Off the Tiller

Your startup began in your brain. A little seed that germinated into something with purpose and potential. You nurtured that seed into a sapling, then a bush, and now a sprawling, verdant tree. No one knows your business better than you, and no one cares more about it. 

But imagine someone telling you what to do with that labor of love you began from your dorm, study, or spare room. You might not realize how attached you are to your business until someone — a stranger — tells you you’re doing it wrong, to cut this and add that. 

Before investment, you survive or thrive under your own steam. You’re lean, agile, and responsive to external changes, ready to test a new idea or head in a new direction. That’s the joy of running a business: You’re under no one’s yoke so are free to do as you please. 

Startup Team Funding

It’s the difference between hedging and betting everything on a single horse. When investors fund your business on the condition you tie your goals to theirs, it may deny you the flexibility you need to survive.

If you make a mistake, they lose their investment but you (potentially) lose your shirt. Imagine squandering a million dollars to rush a product or service to the market only to realize your customers don’t want it. You might recover, sure, but at what cost to your reputation?

Consider what you would do with funding before an investor offers it. Plan for investment early as you would plan for acquisition. Where do you want your company to be in five or ten years? Will raising funding now help or hinder progress to that goal?  

When the Tap Runs Dry, What’s Next?

One of the great things about bootstrapping is that when money is tight, it forces you to think creatively, to come up with ingenious plans and solutions. Money makes things feel easy, but it can be a false economy: What’s the point in growing revenue if it doesn’t come with profits?

Bootstrapping forces you to squeeze the best returns from the smallest budgets.

It teaches you to grow sustainably. Think of it as a training ground: Once you’ve spent years analyzing data, experimenting, and learning what works, you’ll develop a much better plan for investor funds.  

A good analogy is that of the person born wealthy and the person who worked for it. Both might run out of money one day, but only one will know how to regain their wealth. Your most sustainable source of funding is your customers: Please them and the rest will follow.

Now, let’s return to the question at the beginning of this article: Would you sacrifice these benefits to raise funding from investors? I hope, now, you have a general feeling one way or the other. I recommend you trust that instinct when the offers start rolling in. 

Image Credit: Pexels; Thank you!

Andrew Gazdecki

Founder and CEO of MicroAcquire

Andrew Gazdecki is a 4x founder with 3x exits, former CRO, and founder of MicroAcquire. Gazdecki has been featured in The New York Times, Forbes, Wall Street Journal, and Entrepreneur Magazine, as well as prominent industry blogs such as Axios, TechCrunch and VentureBeat.


Fintech Kennek raises $12.5M seed round to digitize lending



Google eyed for $2 billion Anthropic deal after major Amazon play

London-based fintech startup Kennek has raised $12.5 million in seed funding to expand its lending operating system.

According to an Oct. 10 report, the round was led by HV Capital and included participation from Dutch Founders Fund, AlbionVC, FFVC, Plug & Play Ventures, and Syndicate One. Kennek offers software-as-a-service tools to help non-bank lenders streamline their operations using open banking, open finance, and payments.

The platform aims to automate time-consuming manual tasks and consolidate fragmented data to simplify lending. Xavier De Pauw, founder of Kennek said:

“Until kennek, lenders had to devote countless hours to menial operational tasks and deal with jumbled and hard-coded data – which makes every other part of lending a headache. As former lenders ourselves, we lived and breathed these frustrations, and built kennek to make them a thing of the past.”

The company said the latest funding round was oversubscribed and closed quickly despite the challenging fundraising environment. The new capital will be used to expand Kennek’s engineering team and strengthen its market position in the UK while exploring expansion into other European markets. Barbod Namini, Partner at lead investor HV Capital, commented on the investment:

“Kennek has developed an ambitious and genuinely unique proposition which we think can be the foundation of the entire alternative lending space. […] It is a complicated market and a solution that brings together all information and stakeholders onto a single platform is highly compelling for both lenders & the ecosystem as a whole.”

The fintech lending space has grown rapidly in recent years, but many lenders still rely on legacy systems and manual processes that limit efficiency and scalability. Kennek aims to leverage open banking and data integration to provide lenders with a more streamlined, automated lending experience.

The seed funding will allow the London-based startup to continue developing its platform and expanding its team to meet demand from non-bank lenders looking to digitize operations. Kennek’s focus on the UK and Europe also comes amid rising adoption of open banking and open finance in the regions.

Featured Image Credit: Photo from; Thank you!

Radek Zielinski

Radek Zielinski is an experienced technology and financial journalist with a passion for cybersecurity and futurology.

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Fortune 500’s race for generative AI breakthroughs



Deanna Ritchie

As excitement around generative AI grows, Fortune 500 companies, including Goldman Sachs, are carefully examining the possible applications of this technology. A recent survey of U.S. executives indicated that 60% believe generative AI will substantially impact their businesses in the long term. However, they anticipate a one to two-year timeframe before implementing their initial solutions. This optimism stems from the potential of generative AI to revolutionize various aspects of businesses, from enhancing customer experiences to optimizing internal processes. In the short term, companies will likely focus on pilot projects and experimentation, gradually integrating generative AI into their operations as they witness its positive influence on efficiency and profitability.

Goldman Sachs’ Cautious Approach to Implementing Generative AI

In a recent interview, Goldman Sachs CIO Marco Argenti revealed that the firm has not yet implemented any generative AI use cases. Instead, the company focuses on experimentation and setting high standards before adopting the technology. Argenti recognized the desire for outcomes in areas like developer and operational efficiency but emphasized ensuring precision before putting experimental AI use cases into production.

According to Argenti, striking the right balance between driving innovation and maintaining accuracy is crucial for successfully integrating generative AI within the firm. Goldman Sachs intends to continue exploring this emerging technology’s potential benefits and applications while diligently assessing risks to ensure it meets the company’s stringent quality standards.

One possible application for Goldman Sachs is in software development, where the company has observed a 20-40% productivity increase during its trials. The goal is for 1,000 developers to utilize generative AI tools by year’s end. However, Argenti emphasized that a well-defined expectation of return on investment is necessary before fully integrating generative AI into production.

To achieve this, the company plans to implement a systematic and strategic approach to adopting generative AI, ensuring that it complements and enhances the skills of its developers. Additionally, Goldman Sachs intends to evaluate the long-term impact of generative AI on their software development processes and the overall quality of the applications being developed.

Goldman Sachs’ approach to AI implementation goes beyond merely executing models. The firm has created a platform encompassing technical, legal, and compliance assessments to filter out improper content and keep track of all interactions. This comprehensive system ensures seamless integration of artificial intelligence in operations while adhering to regulatory standards and maintaining client confidentiality. Moreover, the platform continuously improves and adapts its algorithms, allowing Goldman Sachs to stay at the forefront of technology and offer its clients the most efficient and secure services.

Featured Image Credit: Photo by Google DeepMind; Pexels; Thank you!

Deanna Ritchie

Managing Editor at ReadWrite

Deanna is the Managing Editor at ReadWrite. Previously she worked as the Editor in Chief for Startup Grind and has over 20+ years of experience in content management and content development.

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UK seizes web3 opportunity simplifying crypto regulations



Deanna Ritchie

As Web3 companies increasingly consider leaving the United States due to regulatory ambiguity, the United Kingdom must simplify its cryptocurrency regulations to attract these businesses. The conservative think tank Policy Exchange recently released a report detailing ten suggestions for improving Web3 regulation in the country. Among the recommendations are reducing liability for token holders in decentralized autonomous organizations (DAOs) and encouraging the Financial Conduct Authority (FCA) to adopt alternative Know Your Customer (KYC) methodologies, such as digital identities and blockchain analytics tools. These suggestions aim to position the UK as a hub for Web3 innovation and attract blockchain-based businesses looking for a more conducive regulatory environment.

Streamlining Cryptocurrency Regulations for Innovation

To make it easier for emerging Web3 companies to navigate existing legal frameworks and contribute to the UK’s digital economy growth, the government must streamline cryptocurrency regulations and adopt forward-looking approaches. By making the regulatory landscape clear and straightforward, the UK can create an environment that fosters innovation, growth, and competitiveness in the global fintech industry.

The Policy Exchange report also recommends not weakening self-hosted wallets or treating proof-of-stake (PoS) services as financial services. This approach aims to protect the fundamental principles of decentralization and user autonomy while strongly emphasizing security and regulatory compliance. By doing so, the UK can nurture an environment that encourages innovation and the continued growth of blockchain technology.

Despite recent strict measures by UK authorities, such as His Majesty’s Treasury and the FCA, toward the digital assets sector, the proposed changes in the Policy Exchange report strive to make the UK a more attractive location for Web3 enterprises. By adopting these suggestions, the UK can demonstrate its commitment to fostering innovation in the rapidly evolving blockchain and cryptocurrency industries while ensuring a robust and transparent regulatory environment.

The ongoing uncertainty surrounding cryptocurrency regulations in various countries has prompted Web3 companies to explore alternative jurisdictions with more precise legal frameworks. As the United States grapples with regulatory ambiguity, the United Kingdom can position itself as a hub for Web3 innovation by simplifying and streamlining its cryptocurrency regulations.

Featured Image Credit: Photo by Jonathan Borba; Pexels; Thank you!

Deanna Ritchie

Managing Editor at ReadWrite

Deanna is the Managing Editor at ReadWrite. Previously she worked as the Editor in Chief for Startup Grind and has over 20+ years of experience in content management and content development.

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