Making money should be consequence of doing business — not the goal

For an entrepreneur, “money” becomes a language to express who you are and what you have accomplished.  Sometimes this focus on money causes the business to lose its identity and its mission.

I heard a pitch recently where a business owner described the business as “a startup with a product that will make a disruptive impact in its industry that will make investors 10x on their money in five years.”  I had to interrupt this verbal streaming to find out what his company actually did.  On another day, I walked into a reception recently where a person introduced himself as “a mid-cap fund manager investing in businesses yielding 10 percent to 25 percent EBITDA”.  And, good to meet you too!

Money is a universal symbol representing financial worth that enhances an entrepreneur’s ability to engage in business transactions.  Without “money,” it would be very difficult to conduct business of any scale.

However, money is only a symbol and has its limitations.

Recently, I started working on an interactive match-making system that we plan to call the Colorado Guide to Capital.  Our goal is to improve access to capital by helping capital-seekers match with capital sources.  If we had limited the definition of capital to just “money,” the Guide would include only financial institutions, funds and foundations that can write a check.  However, we wanted to use the broadest definition of capital to include any resource needed to start an organization or a project.  This includes capital in the form of people, facilities, equipment, intellectual property, social contacts and knowledge.

This activity revealed that many of the essential ingredients in a startup business could not be measured in money.  Teamwork, integrity, trust, competence, knowledge, etc., are all keys to success.  If a startup has all of the money it needs, it can still fail.  Money cannot buy everything.  Jesse Owens made the statement “I had four gold medals, but you can’t eat four gold medals.”  Impact investors use metrics for investment selection that include — but do not stop at — a bank balance.  They look for positive changes.  David Dodson defined economic development as “the process by which a community creates, retains, and reinvests wealth and improves the quality of life.”

Our activity of cataloging capital resources also confirmed that many of these non-monetary resources could be obtained directly without having to raise “money.”  An entrepreneur may engage in barter (trading products/services for products/services) or receive a resource in exchange for equity — an “in-kind investment” — without having to raise money to spend money.  The opportunity to obtain resources directly has some important advantages.  First, it is possible to avoid the cost of raising money (this would be similar to avoiding the transaction fee of trading dollars for euros).  Secondly, those people with money (investors) may not care to invest or price their money so high that it defeats the purpose of the venture.

So, why all the focus on ‘money’.  Is it simply a matter of convenience — a form of shorthand for doing business?  Alternatively, is it a serious reflection of business ethics and forgetting what is most important?

An entrepreneur should be more focused on successfully achieving his or her mission than becoming wealthy.  Making money should be a consequence of doing good business and not the goal.

Karl Dakin is a principal with Dakin Capital Services LLC. Reach him at