The majority of the entrepreneurs are thinking that getting seed fund itself is a great success and a significant achievement. Subsequently, what mistakes are common in entrepreneurs after raising seed fund? Apparently, 50% of the people will relax and lose the focus on product and sales, start spending time more on PR activities and public appearances. Essentially, Inviting an investor is encouraging more responsibility and ensuring returns of investment to him/her. You are more liable, accountable and answerable.
Scaling up the team:
Every entrepreneur would love to increase the team size to get released from the work which he/she don’t like to do, Recruiting human resources in all the departments to create comfort rather than need. Hiring sales folks too early, hiring highly qualified for low profile work, offering big packages than it is needed are few of the mistakes many entrepreneurs do. Human resource is an asset as long as they are limited, it is a liability when it exceeds the limit.
My sincere suggestion to entrepreneurs is: Please be careful about every step you take in the hiring process as it impacts on employee dreams, responsibility, and commitment. Don’t be in the mode of hire and fire at the same time if the employee is under performance you should be happier as you get an opportunity to get a person to get performed well. Essentially, that’s what leadership is. The hiring process should be a big gain rather than a great pain.
Be a great judge about a human resource in the interview else a great coach after interview.
Spending on service providers:
Spending more on service providers, consultants, growth hackers and market research without getting the product ready could lead you to get the funds dried up before expected timeline.
I would suggest if you don’t have the expertise find a good vendor/service provider outsource it and get the experts on boarded but keep one important thing in mind. If it is core and long term activity, you need to build in-house expertise in parallel.
If you have the expertise and it is not a key activity you can still outsource it as your valuable bandwidth can be spent at a right place.
However, you need to do a good amount of exercise between hiring employees and outsourcing to the vendor.
Few entrepreneurs would slowly change their mindset as an employed CEO, as the majority of the stake is diluted and earning a good salary. Dear Entrepreneur, Investor invests on two things A. The founder B. The idea. Deviation of these two directly impacts you as a founder.
Dear Entrepreneur, you were born to be a leader in creating employment for many people. Don’t get relaxed as long as you have the energy.All the best 🙂