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>> early-stage startups who have raised enough money to hire their initial team Is it just me who sees this as backwards? raise money => hire => build? shouldn

>> early-stage startups who have raised enough money to hire their initial team Is it just me who sees this as backwards? raise money => hire => build? shouldn't you have done something before you raise money, or is this my old-fashioned ideas colliding with the new "growth hacker" startup mentality?

austincheney 6y ago
In my case I have built something I believe could be a compelling business interest. It works well enough for complex and sophisticated demos but still has a ways to go for commercial readiness. Once I finish my current military deployment I would like to raise capital so that I can hire developers to get this to the finish line. No matter how confident I am in my strengths as a developer I suffer no illusions about doing everything myself.
AlwaysBCoding 6y ago
I think there's a fairly common story that goes like: two people, founders, spend a few months hacking on an idea together, without getting paid, build a functional MVP, run a beta, get positive feedback from beta users, maybe start making revenue, enough to have confidence in product-market-founder fit, want to start taking salaries so they can work on the nascent product full-time, reach a level of codebase complexity where adding another developer would add a lot of value, decide the right path forward is to raise a seed round to launch and reach a revenue milestone in 12-18 months, raise enough money to pay the founders salaries + make a few hires... And now you're in the situation where you have put in enough upfront work to have confidence in product-market fit but still choose to raise money and build out an initial team ahead of real revenue / traction.
threeseed 6y ago
The world is flush with seed money. So if you have a good team and a relatively good idea you will fairly easily raise a seed round from someone. And it's generally an awful idea for founders: (1) because most assume they will raise a Series-A when statistically they won't and (2) you don't learn to hustle when you have millions in the bank. The best way is to follow companies like Buildkite. Hustle your way to a few million a year in ARR and then you can reach out to Series A investors on your terms instead of theirs.
- sebmellen 6y ago
  Buildkite is an awesome story. $20.2 million in Series A funding at a $145 million valuation [0] is stellar for a bootstrapped company. I'll take this as inspiration for my startup. Of course, it's much harder to build this way, but money breeds complacency, so it's probably best not to look for it. Do you have experience with the seed/Series-A dynamic? [0]: https://techcrunch.com/2020/08/18/melbourne-based-ci-cd-platform-buildkite-gets-28-million-aud-series-a-led-by-openview/ https://techcrunch.com/2020/08/18/melbourne-based-ci-cd-plat...
- jlokier 6y ago
  On (2), you don't learn to hustle either when you have nothing in the bank, the runway ran out, credit card debt, and no time because of the two day jobs to cover domestic and business expenses. A few customers won't bring enough to give you time to work on the product or sales. Having no money is generally an awful idea for founders too. > most assume they will raise a Series-A when statistically they won't > The best way [...] Hustle your way to a few million a year in ARR and then Rather than just highlighting likely failure with just the first approach, I think you need to compare both. Because statistically they won't succeed at hustling to a few million a year in ARR either. Having no money might make them even less likely to succeed. (I'm not sure about this though, it would be interesting to see a good study.)

austincheney 6y ago

In my case I have built something I believe could be a compelling business interest. It works well enough for complex and sophisticated demos but still has a ways to go for commercial readiness. Once I finish my current military deployment I would like to raise capital so that I can hire developers to get this to the finish line. No matter how confident I am in my strengths as a developer I suffer no illusions about doing everything myself.

AlwaysBCoding 6y ago

I think there's a fairly common story that goes like: two people, founders, spend a few months hacking on an idea together, without getting paid, build a functional MVP, run a beta, get positive feedback from beta users, maybe start making revenue, enough to have confidence in product-market-founder fit, want to start taking salaries so they can work on the nascent product full-time, reach a level of codebase complexity where adding another developer would add a lot of value, decide the right path forward is to raise a seed round to launch and reach a revenue milestone in 12-18 months, raise enough money to pay the founders salaries + make a few hires... And now you're in the situation where you have put in enough upfront work to have confidence in product-market fit but still choose to raise money and build out an initial team ahead of real revenue / traction.

threeseed 6y ago

The world is flush with seed money. So if you have a good team and a relatively good idea you will fairly easily raise a seed round from someone. And it's generally an awful idea for founders: (1) because most assume they will raise a Series-A when statistically they won't and (2) you don't learn to hustle when you have millions in the bank. The best way is to follow companies like Buildkite. Hustle your way to a few million a year in ARR and then you can reach out to Series A investors on your terms instead of theirs.

sebmellen 6y ago
Buildkite is an awesome story. $20.2 million in Series A funding at a $145 million valuation [0] is stellar for a bootstrapped company. I'll take this as inspiration for my startup. Of course, it's much harder to build this way, but money breeds complacency, so it's probably best not to look for it. Do you have experience with the seed/Series-A dynamic? [0]: https://techcrunch.com/2020/08/18/melbourne-based-ci-cd-platform-buildkite-gets-28-million-aud-series-a-led-by-openview/ https://techcrunch.com/2020/08/18/melbourne-based-ci-cd-plat...
jlokier 6y ago
On (2), you don't learn to hustle either when you have nothing in the bank, the runway ran out, credit card debt, and no time because of the two day jobs to cover domestic and business expenses. A few customers won't bring enough to give you time to work on the product or sales. Having no money is generally an awful idea for founders too. > most assume they will raise a Series-A when statistically they won't > The best way [...] Hustle your way to a few million a year in ARR and then Rather than just highlighting likely failure with just the first approach, I think you need to compare both. Because statistically they won't succeed at hustling to a few million a year in ARR either. Having no money might make them even less likely to succeed. (I'm not sure about this though, it would be interesting to see a good study.)