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It's another example of "the properties of gasses": they expand to fill their containers. The more money you have, the more money you spend, even if you don't r
by pbreit 11y ago
It's another example of "the properties of gasses": they expand to fill their containers. The more money you have, the more money you spend, even if you don't really need to.
- enraged_camel 11y agoWhen it comes to investor money, at some point you basically have to spend it. That's the expectation of investors: they gave you the money so that you would invest it to expand the business faster than it could organically grow. If you hold onto it and try to continue running a lean business, you'll run into issues.
- pcmaffey 11y agoI'd be curious to hear more about these issues, either from founders who've encountered them or VCs who've created them. I understand the idealogical variance at stake, but the key difference is not whether that money will be spent, but how quickly. I think the ideal situation for a founder would be to grow the company organically, while having money in the bank available to overcome hurdles that can sidetrack a bootstrapped company. There is a balance here that I believe maximizes a company's long-term sustainable success rate. Sure it requires discipline, but that's a foundational attribute for startup success of any kind.
- pbreit 11y agoEntrepreneurs who have a) a very strong track record or b) easy access to large sums of capital can do whatever they want. For the rest, it's helpful to conserve resources while searching for a business model or product/market fit. Then, once you find fire, pour gasoline on it.