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If a startup fails to raise a series A round because it was 5% underfunded at the seed stage, then it was never going to succeed.
by bdowling 6y ago
If a startup fails to raise a series A round because it was 5% underfunded at the seed stage, then it was never going to succeed.
- lmeyerov 6y agoIt's not the highest-order bit for knocking it out of the park, but is already material for daily operations and for one of the biggest factors: team. Scoffing at $50K on $1M means the investor doesn't truly get early stage basics like payroll & compounding. Demanding lazy lawyer fees is explicitly asking to be a "partner" that eats the seed corn, and starts doing it even before anything is signed. The investor ultimately doesn't care because they win when 9 portfolio co's fail and only the 10th nails it. In contrast, founders only have one company, and it can only burn $10-50K on stupid contracts so many times before payroll breaks, and each time is at the expense of compounding effects.
- bdowling 6y agoThe founders and investors are both interested in the company being adequately funded to reach its next stage. So if the founders’ plan requires an extra $50k, then they should ask for more money. If the investor doesn’t want to give it to them, then maybe they should find a different investor or change their plan.
- lmeyerov 6y agoI think I touched a nerve ;-) Founders want to do the most with what they can in their one shot, while investors can play faster and looser across their portfolio, such as burning $50K here on nonsense. Not all, but enough that this article + thread exists.