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The thing with Funding is that you shouldn't really need it but it's more of a fuel when there already is fire (aka PMF). Once you have the fire (most people fa
by codegeek 3y ago
The thing with Funding is that you shouldn't really need it but it's more of a fuel when there already is fire (aka PMF). Once you have the fire (most people fail to get to this point anyway), then you decide if fueling that fire with VC dollars make sense or not for your goals.
The problem is that lot of entrepreneur need funding to even start because they don't have enough resources to start something (may be they need cash, people etc). But VC dont fund because you need cash. They fund because you are able to convince them somehow that you are building a unicorn.
- user_7832 3y agoThank you, that makes sense. Btw is PMF = product market fit in this context? > They fund because you are able to convince them somehow that you are building a unicorn. I'm admittedly very naïve about this, but do they really expect this all the time? (Especially in physical and non-digital markets?) If you have a healthy growth and projection but no plans to say exceed 100M are you limited by how many VCs are interested?
- romanhn 3y agoThe big VCs typically will expect extreme growth, because the big wins are needed to make up for the losses they will incur on many of the their other portfolio companies. That said, there are smaller VCs and private equity firms who will be happy to fund companies with lesser aspirations. Just don't expect comparably big valuations and you'll likely need to cede more control for less money.
- user_7832 3y agoThanks!
- codegeek 3y ago"do they really expect this all the time" This is an interesting question. I don't know if they believe but they def want to believe because without unicorns, they won't survive as most startups fail or have mediocre returns which is not enough for VCs to justify to their own investors/LPs.
- user_7832 3y agoThank you, that makes sense.