Getting out of the VC fog

Why you should stop focusing on getting funded.

So you’ve been working your nine to five corporate job dreaming about greener pastures running your own company. You have an idea for a startup and finally decide to move forward with it. You start coding up a prototype that looks fairly cool, and people in your life are supportive of your new project. Momentum builds, you find a partner, develop a real business plan, and secure some seed funding from friends and family. With that funding you are able to hire a few people and start to form what looks like a company.

Your newly forged company is moving quickly, improving the product day by day and also spending that seed funding. Salaries, marketing, office space, legal expenses — all of this is draining cash from your checking account and you begin to realize that the seed funds will not be enough to get your company where it needs to be. You need another seed round or a series-A from a venture capital (VC) firm.

You go to meeting after meeting with VC fund managers to pitch your idea and you get a lot of feedback. You need more users. Your UI isn’t quite there yet. The target market seems a little off. So you take the feedback and start acting on it. You start playing the game of how to get more users. You start overhauling the UI to some more “modern” thing that one guy suggested. You demo the product to a whole new market. You show the results to more VCs, but instead of closing deals you get more feedback. The cycle repeats. You are stuck in the VC fog.

The VC fog is the phase of your startup where you are developing your product purely to please VCs. The majority of feedback is coming from people you hope will invest, and when they don’t you desperately try to fill the gaps they point out. You’re hungry for money and you see luring investors as the only solution. The VC fog causes you to lose sight of what’s really important to your business: customers and revenue. You’ve substituted solving the customer-revenue problem with solving the VC-funding problem. Instead of thinking about how you are going to provide value to your customers you are thinking about how you are going to impress a VC at your next pitch. The two might seem related, but the former requires real business skill and the latter is more of a game. It’s easy to fall into the trap of playing the game without really working on the underlying business.

Getting out of the VC fog means taking a step back and re-connecting with what you were trying to create in the first place. You weren’t trying to build a pitch deck that would impress investors. You were trying to build a company that provides value to your customers. Spend more time meeting with potential customers and start a feedback loop where you are developing for those people. When the potential customers start seeing value, suddenly you have a real business on your hands and securing capital from investors and VCs will follow naturally.