Closing a VC round is meant to HELP your company take off, not settle. There's a very good reason why it's often referred to as "runway." The number one motiv

Closing a VC round is meant to HELP your company take off, not settle. There's a very good reason why it's often referred to as "runway." The number one motivating factor for startups and the reason why they're able to operate more efficiently than larger competitors boils down to one thing: desperation. Having limited resources makes you desperate and hungry. Besides, living in a cramped apartment and eating ramen is a good reminder of what you get when you don't win (and having a roof over your head ain't too bad). Paying yourselves $300K when you guys probably don't have revenue is a great way to mislead your investors, create politics amongst employees, and, most of all, make you complacent. Now, (mis)using investors' money to live the life isn't unheard of. I once interned at a company that basically lost hundreds of millions of dollars every year and addressed this by systematic studio closures and layoffs. The company's misfortunes resulted from poor oversight by the management team and had almost nothing to do with those being laid off (they all went on the be headhunted by competing firms). Following suit, every year, product-producing employees were let go while executives maintained their $400K salaries. The management team basically did whatever they could to keep the company alive while they drew as much salary as possible. Interestingly enough, this behavior actually began when they got funded in the late 1980s.