Real businesses want to stay in business, not run for the exit. They have a functioning business model, not a believable financial model. Real businesses prioritize their customer's needs over their customer's eyeballs. They focus on customers, revenue and profitability вЂ“ not investors, valuations and the next fundable milestone. 'Real businesses make products and sell them for a profit. Bryce Roberts, founder of Indie.vcВ writes: Unless you're in a big winner-takes-all market (which, in the end, are rare вЂ“ that's why the companies that win them are called unicorns), building a real businessВ can be an attractive option. And you're the only one who benefits from the proceeds. When you self-fund your business, you retain control. Typically, that thing is a hefty return on the investment. The party that funds you wants you to accomplish certain things with that funding. If you can demonstrate that you self-funded your marketplace to profitability, your business is immediately more attractive in the eyes of investors.ДЄny external funding you raise, no matter the source, comes with strings attached. Moreover, most venture capitalists who invest in marketplaces want to see traction: prove that your marketplace works and generates revenue. When youвЂ™re running a profitable business, you're in a much better position to negotiate with investors вЂ“ and say no if you're not happy with their offer.

Spending time trying to raise capital only gets in your way and slows you down.Д®ven if you're sure you'll raise venture funding later, it could be a good idea to bootstrap for as long as possible. If you are in a situation where you can reach your next business milestone without external funding, I recommend you do it. Or you might be targeting a bigger market but have some resources to invest in building a marketplace MVP and the initial marketplace user base. Chances are, you can launch the first version of your business and validate your concept without significant upfront investments in either technology or marketing. Thanks to new technologies, the cost of starting a marketplace business has gone from tens of thousands of dollars to a fraction.ДЇor example, let's say you're targeting a relatively small market that doesn't face heavy competition. Many early-stage marketplace businesses have no need for external funding.

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