"Resist the urge to raise and spend too much money. The track record of companies that raise $30MM or more in their first round is bad."
Q: Is the track record bad, or do they just fail louder than the ocean of companies that raise small amounts of $ and then quietly die? It'd be interesting if someone could prove that a large raise actually hurts your chances, but for a disciplined/veteran founder (who would raise a lot but spend it thoughtfully rather than recklessly), it seems like it shouldn't.
It may also be related to the fact that the get-big-quick scheme is inherently risky in order to return the necessary rewards. If you're raising a ton of money you have to be a home run, and that means you may pass on moderately profitable opportunities in order to keep looking for insanely profitable ones.
sure, but if you haven't taken a ton of money, you have the opportunity at some point to take a strategy that turns a small, steady profit now instead of being continually forced to doubling down on being the Next Big Thing
Good luck aligning those goals with investors'. Most of them signed up for the Next Big Thing, if they wanted a small steady profit, they would've bought a condo and rented it out.
Your point about fail louder is probably right. We dug into data after Sam made this statement and the data suggests there is not much of a relationship b/w initial funding and successful outcomes.
Q: Is the track record bad, or do they just fail louder than the ocean of companies that raise small amounts of $ and then quietly die? It'd be interesting if someone could prove that a large raise actually hurts your chances, but for a disciplined/veteran founder (who would raise a lot but spend it thoughtfully rather than recklessly), it seems like it shouldn't.
Edit: http://www.alleywatch.com/2014/02/the-10-biggest-series-a-ro... - "All of the companies are still operational in some capacity."