Last year the Forbes America's Most Promising Companies identified twenty entrepreneurial ventures with strong promise for growth.
In a follow-up, we find that many of these firms have had success in raising money. Mind you, it has not been a flood gate of cash flow opening for these firms even with the publicity from this event. But, together they have raised about $19 million.
But, because funding is still limited, the firms in this group are being prudent with every dollar they raise, making sure they get the most bang for the buck. From Forbes:
That's not to say some on our Most Promising list didn't express a bit of caution. Brian Javeline, founder of ServusXchange in Pompano Beach, Fla., anticipates shelling out to further develop his Web-based software that lets building contractors manage invoices, create estimates, schedule work orders and communicate with subcontractors. However, he notes: "Nothing is being spent unless we clearly have to."
A key reason these firms have been able to raise money is that they are doing what they said they were going to do. Making promises is not enough -- you have to hit your milestones. Most investors have a much more cautious approach to funding these days. Rather than betting on a plan and a dream, they now expect entrepreneurs to show them results before investing any money. The Forbes list of growing companies are hitting many of their milestones, as can be seen in this article.
That requires more an more firms to learn the art of the bootstrapping start-up and often need to continue bootstrapping to get by between rounds. Pre-revenue financing is very rare right now, and even growing firms must be patient for any follow-up rounds of funding.
Money is tight but it always seems that it has been tight for entrepreneur. The entrepreneurial spirit somehow propels us to do more with less.
One can still raise money but is takes a bit more planning and organization these day.
Great article.