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by jonathanehrlich
2139 days ago
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@ Aaron - Thanks, as always, for the thoughtful note but I disagree with you on this. Yes, there is risk of over-dilution if you raise boatloads too much out of the gate (including the very real and potentially fatal risk of being undisciplined on spending). But at the end of the day, if a founder figures out the business in that first 12 month window and is still sitting on another 12-24 months of cash, she has so much more power than if she is 4 months to cash out. She can take capital now but exactly on her terms. She can decide to keep pushing and raise in 12-18 months when the business will be in even better shape (and valuations higher, etc). Time becomes her friend, not her enemy. In my opinion, one would be crazy not to take more capital when it's this insanely cheap (valuations for 2 people with a powerpoint have never been higher). As we've seen with so many great companies, p/m often takes more than 8 months. Take more than you need and buy time. It will come out in the wash. I know this may sound self serving given my VC Cloak but having raised my first venture round as a founder in 1998, it comes from a place of experience (and pain). Thanks for listening. |
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I think we're mostly on the same page here. I'm less concerned with companies that raise 18-24 months of runway than the ones who are coming out of seed rounds with 36 months or more. I think balance is critical, and I'm hoping that founders find more of that balance vs. the recent pattern I've observed of founders taking every available dollar.