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Should Startups Focus on Profitability or Not?

Both Sides of the Table

If you hire 6 sales reps in January at $120,000 / year salary then you’ve taken on an extra $60,000 per month in costs yet these sales people might not close new business for 4-6 months. Fast early growth in a market is often eroded when competition gets fierce and prices are forced down due to competition. Not necessarily.

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Choose Your VC Investor Carefully

Both Sides of the Table

For example, a recent phone call I had with a young entrepreneur straight out of one of the most prestigious engineering schools in America he asked, “I have an offer for $400,000 in seed money but the VC wants me to agree now to bring in a new CEO.&# This company is doing its SEED round and they already want to bring someone new in.

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How to Fund a Startup

www.paulgraham.com

I wassurprised recently when I realized that all the worst problems wefaced in our startup were due not to competitors, but investors.Dealing with competitors was easy by comparison. It wasnt because they werent accredited investors that I didntask my parents for seed money, though.

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From Nothing To Something. How To Get There.

techcrunch.com

or just present your crappy, first-run code to investors then pay someone to re-write the entire thing. The contract work burn out is totally where I’m coming from… chip WAAIIITTT… wasn’t the coding of the first version of Digg outsourced to some guy on Elance? What did you do again? Who knows.

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The Series A crunch is hitting now. Have we even noticed?

pandodaily.com

“I wouldn’t expect anyone except seed investors to complain about it,” Graham says. “Founders don’t think their problems are due to trends. They’re cutting salaries and making the last tens of thousands — or if they’re lucky a hundred thousand — last. The Week in Review.