3 ms·
> If you need more capital to keep the company alive but don't have a clear plan for using that money then you're probably not ready for your next major round o
by CalChris 10y ago
> If you need more capital to keep the company alive but don't have a clear plan for using that money then you're probably not ready for your next major round of financing.
That's a polite way of hinting that you really should consider shutting down.
- lpolovets 10y ago(I'm the author.) Kind of :). But this is also what bridge/extension rounds are for. Perhaps you raised a $1.5m seed round and your goal was to validate 4 key hypotheses with that capital. If you validated all 4, then that's usually a great segue into raising a Series A. If you validated 0-1, that probably means your company isn't viable. If you validated 3 out of 4, or maybe even 2 out of 4, there's evidence that you might be on the right track, and you can often raise another $1m or $2m extension from investors who believe that you will validate the remaining hypotheses if you have a little more runway.