5 ms·
This is interesting in how un-interesting it is. Find product-market fit before taking investment. Because the only reason to take VC investment (for the etype
by mildbow 11y ago
This is interesting in how un-interesting it is.
Find product-market fit before taking investment. Because the only reason to take VC investment (for the etype of startups we are talking about) is as a steroid injection towards growth.
Why is this the only time it makes sense? Because that's the only way you and your investor's incentives are aligned.
Now, whether you need to/should grow fast to survive in the long term is another question.
- danielrhodes 11y agoThis. It's fine to raise a seed round (< 1M) to experiment with some ideas, but raising money after that without product market fit is a recipe for failure. If you don't have P/M fit and you raise a bigger round, you're going to hire people and create an organization around something that doesn't work. With those extra people and processes, things are going to slow down to the point where finding that P/M fit becomes much harder. Moreover, you are now accountable for expectations and a reasonable return for your investors, which is not a bad thing, but it is a distraction when it comes to P/M fit. For B2B businesses, raising a Series A means being able to hire your first sales/marketing people. For consumer businesses, raising a Series A means being able to pay for the growth that's happening without worrying about revenue right away.