I turned down a $500,000 investment for my company.
At the time, I had at best enough money to run one more payroll cycle (excluding myself).
If I didn’t raise another round of funding in time, I’d have to shut down operations.
Why would anyone turn down half a million dollars when a company desperately needs it?
If I said yes, the money would hit our bank account by the end of the week.
Here’s the twist: The terms of the agreement would have helped us in the short-term, but it would have jeopardized the long-term success of my company by giving up a substantial amount of control in the company.
My close friends, family, and even my co-founder begged me to take the deal.
The investor was calling me at least once a day.
Everyone around me thought I was insane to even consider turning down that kind of money.
I spent the next 36 hours wide awake weighing the pros and cons of my fateful decision.
In the last hour, I sent an email respectfully declining the offer.
The investor told me that I just made the worst decision in my life.
And that’s when I knew I had made the best mistake of my life.
Sometimes in business, subtraction adds value.
I took a long walk and realized why I started this company in the first place.
It was to build a world-class product that served our customers, not investors.
In the next 2 months, we reduced our burn rate and became “ramen profitable” (made enough money for food + rent).
Shortly thereafter, we connected to investors who shared the long term vision of our company.
And the rest was history.
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