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> The Worst Case: > The company runs out of money. Actually, the worst case is keeping a company going even though the fundamentals of the business are imprec

> The Worst Case: > The company runs out of money. Actually, the worst case is keeping a company going even though the fundamentals of the business are imprecise, hard-to-define or just plain wrong. You end up wasting resources of all kinds for everyone involved. Investors, employees, and founders, to varying degrees, will squander time, energy, enthusiasm, money in pursuit of a mirage. Money isn't everything, surprisingly, even in a round of funding. If you accept a huge sum of cash with a giant valuation attached, you must have reasonable certainty that you will at some point achieve that valuation without more raising. Mental gymnastics aside, I don't think most startups can guarantee outcomes, but they must be, at least, certain of their motives. Are you raising because you're at the scaling stage? Or are you raising to buy yourself a little bit more time to hopefully, maybe, figure things out? The latter reason is a poor reason to raise, and most of the time, only staves off the inevitable at the cost of unnecessary suffering and hardship.

CalChris 10y ago
This is brutal but fair. I'd say it's a good counterpoint to the cynical (and good) summary above. A founder is a fool if they don't think the clock is ticking. Fools don't focus; fools fester. Indeed, the article isn't even talking about putting more money into a worst case scenario; it's talking about founders aggressively using the resources they've been given.
edblarney 10y ago
"Investors, employees, and founders, to varying degrees, will squander time, energy, enthusiasm, money in pursuit of a mirage" Most 'employees' will never see any significant upside in any of the startups they've worked at or will work with - so their compensation is their livelihood and not exactly a waste of time. There is a lot of inefficiency at big companies as well, so it's arguable that most tech workers are 'wasting at least some of their time' in the big disorderly march to progress. They are also gaining skills. But I agree it's a pretty bad thing to do to raise money to 'figure things out'. I'd loathe to think of how many of those would actually get funded.

CalChris 10y ago

This is brutal but fair. I'd say it's a good counterpoint to the cynical (and good) summary above. A founder is a fool if they don't think the clock is ticking. Fools don't focus; fools fester. Indeed, the article isn't even talking about putting more money into a worst case scenario; it's talking about founders aggressively using the resources they've been given.

edblarney 10y ago

"Investors, employees, and founders, to varying degrees, will squander time, energy, enthusiasm, money in pursuit of a mirage" Most 'employees' will never see any significant upside in any of the startups they've worked at or will work with - so their compensation is their livelihood and not exactly a waste of time. There is a lot of inefficiency at big companies as well, so it's arguable that most tech workers are 'wasting at least some of their time' in the big disorderly march to progress. They are also gaining skills. But I agree it's a pretty bad thing to do to raise money to 'figure things out'. I'd loathe to think of how many of those would actually get funded.