Your well-funded startup is already dead


Your well-funded startup is already dead

Once a startup raises their seed round, more often than not I see a team slipping into trouble after just a week.

The founders may have just banked a year’s worth of runway, it doesn’t matter. I already know the startup is going to die.

Here’s what I see three quarters of startups doing immediately after they raise a seed round:

  • After months of working 60 hour weeks (and the rest, usually) to launch and demonstrate early growth to convince investors they’re worth it, the founders start working 9am til 5pm, five days a week — they’re taking it easy before the hard work starts;

  • Because raising money offers a financial opportunity to address their work/life balance, their Facebook feed slowly fills up over the following weeks and months with snaps from weekends away on city breaks, at parties and gigs;

  • They almost certainly find the time for a holiday, or a trip home to see the family, because they deserve it;

  • A new apartment or house is high on their priorities since they can now pay themselves proper wages;

  • There’s finally time to make amends to a long-suffering partner — perhaps they can finally plan that dream wedding they’ve talked about for months.

If this is still occurring in the weeks after the raise has happened, these startups will likely be dead before they raise Series A.

The point of a seed round is to help your startup stay alive long enough to prove that customers and consumers love what you’re doing. Nobody is going to give you more money until you can prove a lot of people love what you do.

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Posted on 24 Sep 2015