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Why Raising Too Much Money Can Harm Your Startup

Both Sides of the Table

It is a truism that with more capital you will hire people more quickly and spend more liberally whether it’s on external contractors, PR firms, attending events, doing legal work (trademarks, patents) or whatever. It forces harder decisions about whom you’ll hire and whom you’ll delay. million or $4 million.

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Take Five – How will the downturn continue to play out on startups and venture capital

VC Cafe

Building on my post on ‘ Advice for startups in a downturn (May 2022 edition) ‘, this week I continued to follow with interest the impact of the current correction on startups and venture capital, particularly in early stage. Layoffs and hiring freezes have started. Sequoia’s Adapting to Endure.

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Why Startups Should Raise Money at the Top End of Normal

Both Sides of the Table

Early-stage investors in technology startups are only looking for growth-oriented companies that can achieve an “exit&# someday – either via selling your company to a larger company or via an IPO. 1 year in you stop catching early morning flights. But 6 months later you’re not working past 10pm.

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Grow or Die – - Revenue growth must be the core strategy and drive all other strategies.

Scalable Startup

Flat to negative revenue growth is a real red flag, especially for early stage companies. If you’re venture funded, things get kind of ugly -unhappy board members, cut off from communications, down- rounds to keep you going, or no more funding. Your stakeholders start to wonder what is going wrong? Press Mentions?

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A Recently Exited Founder on Surviving the Contradictory Role of Startup CEO

View from Seed

I called the recruiter running the search and told him I was going to step down and hire a CEO. So, in order to hire a CEO, we have to give someone their first shot at the job.” It’s nice to get great valuations and hire A-players. His response changed the way I thought about the CEO role for the next five years.

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10 Rosh Hashanah Resolutions for Startup Founders

VC Cafe

So in terms of hiring, get people that can help you build the product faster… anything that minimizes the time between observing a need or a problem, and the execution or the fix for it.” A good way to think about valuation in seed/pre-seed is to reverse engineer the next round. Remember that speed is the secret weapon of startups.

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Market Truths

thebarefootvc

However, many variables come into play when investing at the early stage. A VC’s job is to spot sustainable trends while they are in formation stages, and form a point of view on the timing of the adoption of those trends. Build solid relationships with strategic partners and customers.