Quit flapping your arms and build your damn plane: what to do next after a raise
source link: https://www.startupdaily.net/2021/12/quit-flapping-your-arms-and-build-your-damn-plane/
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Once you’ve raised capital, don’t manage the business as if you’ll never be able to raise again. You need momentum.
I remember disagreeing with a startup founder when he said:
“I wish I’d allowed for the possibility that we might not be able to raise another round and managed the business as if we’d have to break-even on what we had in the bank.”
That’s often possible for a bootstrapped startup but once you buy a ticket and get onboard the investment train, it’s an express to Outcome City.
Investors hoping to minimise the risk of losing all their money invest in government bonds, not startups.
I have never wanted to thank a startup I’ve invested in for making my money last as long as possible. Prove or disprove the central hypothesis, then let’s move on; richer in experience if not financially.
Don’t get me wrong — I don’t want to hear about expensive marketing stunts and the new office jacuzzi. But I do want to see evidence of momentum.
So much about the success of a startup is related to creating and sustaining momentum — rapid improvement of product, rapid testing of acquisition channels and funnel, and rapid growth in customers.
Momentum in customer growth acquires more customers because people are voting you up and writing about you.
Momentum in product development rewards customers, makes them look forward to new features instead of dreading another trudge through your semi-working MVP.
Momentum in developing better channels and funnel makes the customer feel like you’re learning to understand them.
Achieving and sustaining momentum is a powerful force in early-stage startups too often ignored by lean startup adherents.
But it takes more people and resources to achieve momentum than to putt-putt along, and sustaining momentum means your burn rate will be faster and the runway will be shorter.
So be it. If you don’t think you’ve got the right people, resources and capital to nail momentum, I want you to come see me. Because the best way I can help you not blow my investment is to help you go out and raise more.
If being a startup is like jumping off a cliff and trying to assemble a plane on the way down, then managing your startup as if you may never be able to raise again, is like flapping your arms instead of building your plane.
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