"Thanks for the candid advice" A founder recently asked me if their plan would get them on track for a series B. I suggested they focus on what would allow them to avoid series B. Why? The main reason is, outside of "AI Companies", it's very hard to know what growth investors want. And if they do agree to terms, the recent data suggests we're back to 2022/2023 levels of down rounds. This means for non AI companies, we should assume this is now the MAJORITY of growth rounds. It's discount shopping season again. So a deal will almost certainly come with some of your best talent leaving - why would they stay if their stock value plummets after years of work? And then you're still left trying to hit the growth metrics you promised along with a harder hurdle to get everyone paid if you wind up (most likely) selling your company. In many cases, founders have a lot more control if they aim for cashflow-related goals so they don't need a growth round. It doesn't mean no growth round ever. It means a much stronger negotiating position if and when you decide to do it. In the meanwhile, the private credit market is looking for deals, so you have more options...another great reason to focus on cash and growth, not just growth.
Robert Sher
1d
So true.
Positive cash flow is liberating😀