Startup Advice

After raising $4 million, rising startup star reveals why fundraising is the means not the end 

Andrew Barnes /

Andrew Barnes GO1

GO1 co-founder and chief executive officer Andrew Barnes. Source: Supplied.

GO1, the education technology startup I co-founded, recently announced a $4 million raise. Inevitably an announcement like this triggers a stream of congratulations and questions on how to fundraise.

I find it somewhat awkward to respond. Raising money should not be seen as an achievement in itself. Instead, hopefully, it is the means to achieve the real work that a business is setting out to do.

Our goal is to transform corporate learning by providing the world’s largest marketplace of courses. Raising investment helps fuel our growth faster than we could through free cashflow — no more, no less.

So rather than address misplaced congratulations, I want to respond to questions on how to fundraise and share some advice to Australian founders.

1. The startup ecosystem in Australia is getting stronger — you should look local and global

I first experienced Silicon Valley when GO1 went through Y Combinator (the first accelerator responsible for Airbnb and Dropbox). At the time the Australian ecosystem just couldn’t compare.

That’s changing, and we’ve got a growing local startup community. There are now many significant Aussie venture capital firms and experienced angel investors.

Good investors add more than just money to your balance sheet, they can provide advice and networks that can be invaluable. There are increasingly good options locally.

At the same time, I think it’s really important to have a global mindset from day one. Investors look for returns, and often the Australian domestic market is only going to be a fraction of the opportunity.

Having international experience in the pool of investors you talk to can be tremendously helpful. Even if you might be too early-stage for overseas investors, you can learn a lot through pitching your plan to them.

2. Either be in fundraising mode or not

Raising investment takes time. Having a meeting might seem trivial, but providing documentation and answering questions can consume huge amounts of time (and inevitably no two investors ask the same questions).

If additional capital is fundamental to your future plans, then be in fundraising mode and have a clear plan for how you approach it. Don’t do it half-heartedly. The longer it takes, the more distracting it will be for your business.

Remember, raising money is the means and not the end itself. The time you spend fundraising has an opportunity cost — time you could have spent growing your company.

3. Raise what you need

Have a plan and timetable that aligns with your business growth and product roadmap. Our business plan is built on growing our inside sales team. We just closed our pre-series A round to help us get to the next level of growth for the company.

And any time that you raise money, you should assume that it might be the last dollar of investment you will ever receive.

The investment market swings from famine to feast and back again quickly. As I write this, in Australia we are in a good period where many people are interested in supporting and backing startups. That won’t necessarily always be the case.

Even good companies can struggle to raise further rounds. So in addition to raising what you need to get your business to the next stage, aim for your runway (the amount of time you have before your money runs out) to be long enough to get you to a cash flow positive position.

4. Stay grounded

And finally, remember, keep your feet on the ground — don’t get carried away if you do secure venture funding. You’re doing this to solve a problem — the real work is running and growing your business.

NOW READ: Ten lessons from a 28-year-old founder who started three businesses and sold two, all while maintaining a full-time job

NOW READ: The ‘anti-startup’ story: How to turn $1,000 into $15 million with no investment

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Andrew Barnes

Andrew is the co-founder and chief executive of GO1, a world leader in online learning and education.

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