What would happen if you couldn’t [ raise money in startup ] for a year or two?

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What would happen if you couldn’t raise money for a year or two?

Selling = Doing Things

Strategy = Doing Things

Planning = Doing Things

Road Map = Doing Things

Budgeting = Doing Things

Production = Doing Things

Projections = Doing Things

Startups = Doing Lots of Things

Be a doer!

Capital has come easy. Times have been good for a very long time. We’ve seen several years of momentum investing, relatively easy money, valuations beyond reason, and other irrationalities an ultra competitive-market creates, but those days are almost entirely behind us.

Venture capitalists are herd beasts. When large fractions of the investment in startups are written off or marked down valuations there will be panic in the herd.

Bad stock markets mean fewer IPOs and lower prices for M&A. This has a tangible impact on the valuation of start-ups and the pace of investment. If the stock market holds then the pace of VC may hold steady.

With VCs running a tight ship, entrepreneurs need to do everything they can to insulate themselves from the impending turbulence of the funding market. A funding freeze is visible, and those caught unprepared will struggle to survive.

I worry that too many of today’s entrepreneurs don’t know what fear feels like. Yes, it’s uncomfortable spending time thinking through worst-case scenarios, but think of it like wearing your seat belt.

Time to prepare accordingly.

Biases

You see it all the time in the venture capital industry. Older ones fall behind the younger generation in understanding the new technology & its impact.

Even if you know that technology has evolved, the idea that what the old investor learned in the past may no longer be relevant is so painful that it’s easy to reject the new idea. Expertise is great, but it has a bad side effect. It tends to create an inability to accept new ideas.

Unlearn to learn.