Revenue vs Money

When it comes to growing the business, there is a difference in money versus revenue. Before you thank me for crystalizing the obvious, let me explain what I mean in the context of a startup.

Revenue deals are tied to a company’s core assets and talents and become a repeatable and scalable transaction. This involves an understanding of the different pieces that need to come together and how it comes together in your operating plan (people, servers, commissions etc.).

A “money” deal does not play to the skills and vision of the company and does not leverage the core assets and talents. These deals typically happen someone approaches the company and offers money in exchange for what amounts to customized development or when a company is struggling and trying to reduce burn, find a business model or simply build momentum.  There are exceptions here – sometime the right deal can take the company out of its comfort zone and lead to bigger and better opportunity but, that is more of the exception.

I have found that teams can often agree on a plan when they have a good framework for a discussion. If there are serious differences of opinion you may want take a step back before moving ahead with any deal and make sure the team is aligned on where you are going.

Obviously strategic deals and revenue deals can overlap, hopefully they do. However, there may be instances where the path to revenue is not immediate or as clear as you hope. This is a great time to get advice from your board, advisors and key management personnel.

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