“We need $1 million.” 

You may need it. But does anyone want to give it to you? 

So many founders treat venture capital like a gas station. When you’re out, come in for a refill!

That worked in 2021. It doesn’t work now. 

What you need is not the investor’s problem. Their problem is taking their capital and getting a return on it. 

Banks don’t give money to those who need it. Same with VC.

When I started investing in startups in 2021, the standard was 3x year-over-year growth. If you could show that, you were fundable.

Those days are over. 

The standard today is 10x year over year. 

For any other than the fastest-growing companies today, another round may not be there.

Stop assuming another round will be there. Whether they know it or not, many startups today have raised all the venture capital they ever will. 

Money is concentrating into a handful of extremely high-growth startups.

I see it every day. A $50 million Series A at $500 million, not a $10 million Series A at $50 million.

That $50 million going to the fast-growing company means four other traditional Series A’s didn’t happen. That leaves those slower-growth companies out in the cold. 

That might not be fun, but it’s survivable. Unless, of course, you’re burning a lot of money. 

Always have a plan to get to breakeven, fast. Or better yet, simply be there by the time you’re raising!

Then you don’t need investors like me. 

If the terms are favorable, you can take our money. If they’re not, you can tell us to sod off and keep building on your own. 

Don’t let your company die! Always be within spitting distance of breakeven.

Then you set the terms.

More from the blog:

You Finally Closed Your Funding Round — Time to Panic?

Nobody Knows the Future

Stop Waiting for People to Believe in You

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