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Author Topic: Article about startup founders stuck in the middle of making it or breaking it.  (Read 1283 times)

kyrathaba

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2013-06-06_101417.png

http://www.seanpercival.com/blog/2013/06/03/how-to-survive-the-series-a-crunch-from-someone-who-didnt/

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Recently I had to step down from my own startup for a few reasons, the main one being #1 on that list above: Don’t run out of money. Once I stumbled on that point, I found it tough to regain my footing with the business. So while the “Series A Crunch” was not the entire reason for my failure, it was a major contributor. It set off a chain of events that left me holding nothing but thoughts of how I could have done things differently.

desparation.png

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The best advice I can give founders here is to ignore the cries for more traction, especially when it would hurt your business or deplete your cash to satisfy those demands. Buy yourself more time and make the investors wait. They hate waiting, and as a result you may miss a train or two, but if you can emerge with a more sustainable (or profitable) business, your fund-raising needs will quickly move from “we need cash to pay rent” to “we don’t really need your cash, but we’ll take it to grow even bigger.”

TaoPhoenix

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In some ways, this article bothers me - if business is about "acquiring talent", then who says the founder has to be the one to *get* the money? Not running out of money is an Ops thing - getting it is something else. So why not hire a "funding" guy/gal whose whole role is to schmooze the investors?

Also this post describes what I'll call the "danergerously thin role of Founder" - if all you have is the Idea, but you're "acquiring good talent", how do you stop a coup?

"In terms of market conditions we pulled off a trifecta of unsexiness. We were e-commerce, subscription commerce, and “family tech.” By this time investors weren’t very interested in any of those things. That was clear early into the fund-raising process, but we kept trying to push it through."

(Figuratively to Founder) "So why in fact were you starting that business?"

Elsewhere in a whole other context I saw an article about a woman who did the "semi-amateur" call girl circuit to ruthlessly get cash for her art career. So this guy sounds like he's straight out of the biz books section and then reality called his bluff. If you have the Long Game idea, but you're stuck on funding, find a simple "boring" side biz to pay the rent.

"Cutting costs is one of the more difficult things an early-stage founder has to do; I can relate. ...The operational and employee-happiness costs should be easy to cut. I know we all want to create a great company culture, but if you need to extend your runway that’s a lot more important than catered lunches or other perks. A loyal team member is going to stand by you even when times are tough and the snack cabinet is bare."

This is TOTAL BS. If your biz is so thin that "snacks for the kitchen" are killing you, you're toast. Playing "penny wise" with the staff also does NOT generate "loyalty".

« Last Edit: June 06, 2013, 03:25:02 PM by TaoPhoenix, Reason: Edited to remove the sentence about salaries »