Overfunding Kills Startups
Funding = Success, right? I wish it did. But entrepreneurial tracks are littered with carcasses of dead startups that were very well funded, some to the tune of hundreds of millions. As a case in point, watch this 2 minutes 31 second video: Death of Nasty Gal.
If you prefer to read instead of watching, read the Nasty Gal story here:
Death by Overfunding: Nasty Gal
And, here are three more stories of entrepreneurs whose startups have died because of their addiction to venture capital.
Each started with a promising business.
Then each went overboard in their quest for hyper growth without paying attention to fundamentals.
Death by Overfunding: Glam Media
Death by Overfunding: Gilt Groupe
Unless you are a Facebook or a Google, a capital-efficient, scrappy strategy is your best bet for success.
If you are exploring funding, consider getting an experienced mentor first. Get a mentor who has seen many different scenarios and who knows how to anticipate what could happen next. Have no such relationship? Come and talk to me.
Looking For Some Hands-On Advice?
For entrepreneurs who want to discuss their specific businesses with me, I’m very happy to assess your situation during my free online 1M/1M Roundtables, held almost every Thursday.
