4 ms·
> In the seed round investors are betting on the vision, but in the A round, they need to see results. They want to see rapid growth and they want you to be pro
by rsp1984 12y ago
> In the seed round investors are betting on the vision, but in the A round, they need to see results. They want to see rapid growth and they want you to be profitable or able to make it to profitability on the money you have in the bank. We’ve seen many companies get burned by this.
This is probably true in many cases but it doesn't seem to be a rule that's set in stone, especially for hardware startups. For example Lytro [1] has raised $50M in a Series A before they sold product. Same for Anki [2].
As a pure software company, Vicarious [3] have raised $55M in Series A and B rounds and I don't see a product on their site either.
[1] https://lytro.com/ https://lytro.com/
[2] https://anki.com/en https://anki.com/en
[3] http://vicarious.com/ http://vicarious.com/
- boulos 12y agoSince I know the founders of the first two: those are hardware companies. A non-trivial difference in everything said here is that when you need to put down an order to build and manufacture X000 units, other people in the supply chain aren't okay with "We'll just pay you per item as you make them on demand". To a degree that's what the "unless you're the next SpaceX" from the post seems to be trying to encode: unless you're in a structurally high-cost business, you better not need tons of capital.