Photo by Chris Moore on Unsplash

In The Messy Middle, Scott Belsky says “For strong companies, financing is a tactic. For weak companies, financing is a goal.”

It’s real easy to see financing as a win. It is validation of a sort. Somebody believes in your company enough to buy part of it. Success!

Wrong. That kind of thinking is a trap. When you raise capital you not only give up part of your company—so there’s less for you and your team—but you are responsible to more people and have to execute relentlessly on a vision you just sold. You told your investors you’re going to build this company and make them rich. They believed you. They’re picturing retirement vineyards, catamaran racing, and putzing around the Greek Isles. Your investors expect you to do everything you can to make it happen for them.

It’s not all bad news. Capital means you have the opportunity to do new, bigger things. It’s just that you also have the obligation to do new, bigger things. In other words, it’s a great tactic in the right circumstances, but it’s no endgame. So don’t celebrate closing a round of financing like it’s a win. Celebrate like it’s a kickoff. Because it is.