Key insights

• 💰 Manage spending carefully after the seed round, Hasty spending can deplete funds and lead to failure, Assume no further fundraising when allocating expenses
• 📊 Fundraising is difficult for most companies, Many companies struggle to raise subsequent rounds, The bar for raising funds gets higher with each round
• 🎯 Focus on making the company survive, Raising financing is a means to an end, not a goal itself, Being mindful of ownership can influence decision-making, Consideration of expenses from day one
• 📅 Clear milestones and metrics are essential for fundraising, Typically given 24 months to achieve milestones before raising another round, Starting fundraising before running out of money is advisable
• ⏳ 8 months of runway left, 16 months to achieve milestones, Focus on increasing spend after revenue starts coming in, Avoid spending more than the revenue generated
• 🔍 Save half of the seed round money in a separate account for frugal spending., Operating as if the funds are not available for the first year promotes wise spending., Startups often spend money too quickly., It is challenging to raise another round of funding, so wise spending is crucial.

Q&A

• How should startups operate with their funding?

  Startups should be frugal with their funding and operate as if they will never be able to raise another round, saving a portion of the seed round money for frugal spending and promoting wise spending.

• When should companies aim to achieve their milestones and increase spending?

  Companies should aim to achieve their milestones within 16 months before their runway runs out. Once revenue starts coming in, they can increase spending but not more than the revenue generated.

• What is essential for fundraising, and when should fundraising ideally start?

  Clear milestones and metrics are essential for fundraising, and it's better to start fundraising when there is a runway, typically given 24 months to achieve milestones before raising another round.

• What should founders focus on instead of just raising rounds of financing?

  Founders should focus on making their company survive rather than just raising rounds of financing. They should also be mindful of ownership, as it can influence decision-making.

• Why is fundraising challenging for most companies?

  Fundraising is difficult for most companies because many struggle to raise subsequent rounds, and the bar for funding gets higher with each round.

• Why is it crucial to manage spending post seed round?

  Managing spending carefully after the seed round is crucial because hasty spending can deplete funds and lead to failure, assuming no further fundraising when allocating expenses.

• 00:00 It's crucial to manage spending post seed round. Spending money too fast can lead to running out of funds, potentially causing the company to fail. Spending should assume no further fundraising.
• 00:17 Fundraising is challenging; most companies struggle to raise subsequent rounds, as the bar for funding gets higher.
• 00:36 📈 Founders should focus on making their company survive and not just on raising rounds of financing. Being mindful of ownership can lead to better decision-making.
• 00:55 Raising funds requires clear milestones and metrics to achieve within 24 months, before running out of money. It's better to start fundraising when you have a runway.
• 01:12 Companies should aim to achieve their milestones within 16 months before their runway runs out, and once revenue starts coming in, they can increase spending but not more than the revenue.
• 01:34 Startups should be frugal with their funding and operate as if they will never be able to raise another round.