🔆 Having investors chase you...

This morning, I received a question from one of you about the last line in yesterday’s Daily: The promise of having investors chase you instead of the other way around…

Her question: How do you achieve that? 

 

Great question! So, I decided to focus this Daily on digging into this.

But let’s take a couple of steps back for now. 

 

A couple of things have changed over the past years. 

  1. It’s getting easier and easier to build remarkable business software. 
  2. The market is more volatile than ever. 
  3. Businesses must stand on their own legs because funding is not readily available anymore.

It requires many SaaS businesses to change – whether they like it or not. I have started to refer to this as “Creating Funding Freedom.”

 

Here’s why: 

When your business has Funding Freedom, you’re designing it to firmly stand on its own legs.
It’s the resilience to withstand adversity. It means you have options. You can say ‘Yes or No’ when you want to – not because you have to.

A SaaS business with funding freedom doesn’t have to worry about runway.
It generates enough cash flow and profits to make bets and can do what’s best for the business long-term.

Creating Funding Freedom doesn’t necessarily mean you’ll never take funding – to the contrary.
What it means is: You have a choice. A choice that comes from a position of strength.

As you can imagine – investors love that.

  • You’re much less of a risk to them
  • You can say with pretty high confidence what the return will be if you invest $1.000.000 into something.

So what’s foundational to creating Funding Freedom (or to get to a position where investors chase you instead of the other way around?

Some pointers:

  1. It means seeing customer revenue as the ideal source of funding.
  2. Which starts with building something highly valuable/critical in the eyes of the right customers. (= obsess over customer value)
  3. Something they are prepared to pay a premium for (= margin)
  4. And something you can consistently deliver with quality (= scalable)
  5. So they’d miss it if it were gone. (= retention)

Doing this will be the best way to start a flywheel that helps you grow with more ease (word of mouth) and produces enough cash flow and profits to have options.

That’s your strongest negotiation position with investors: You don’t need them; they want you.

 

Here’s an essay I wrote about this – I hope this helps: https://valueinspiration.com/saas-funding/

 


Question for you to reflect upon:

What would be the first step for you to take to create Funding Freedom?


 

Be Remarkable

 

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About the author

Sales Pitch

Ton Dobbe is a former B2B software product marketer who's on a mission to save mission-driven SaaS CEOs from the stress of 'not enough' traction. He's the author of The Remarkable Effect, the host of the Tech-Entrepreneur on a Mission podcast, and writes a daily newsletter on the secrets to mastering predictable traction.