Your well-funded startup is already dead
Once a startup raises their seed round, more often than not I see a team slipping into trouble after just a week.
The founders may have just banked a year’s worth of runway, it doesn’t matter. I already know the startup is going to die.
Here’s what I see three quarters of startups doing immediately after they raise a seed round:
- After months of working 60 hour weeks (and the rest, usually) to launch and demonstrate early growth to convince investors they’re worth it, the founders start working 9am til 5pm, five days a week — they’re taking it easy before the hard work starts;
- Because raising money offers a financial opportunity to address their work/life balance, their Facebook feed slowly fills up over the following weeks and months with snaps from weekends away on city breaks, at parties and gigs;
- They almost certainly find the time for a holiday, or a trip home to see the family, because they deserve it;
- A new apartment or house is high on their priorities since they can now pay themselves proper wages;
- There’s finally time to make amends to a long-suffering partner — perhaps they can finally plan that dream wedding they’ve talked about for months.
If this is still occurring in the weeks after the raise has happened, these startups will likely be dead before they raise Series A.
The point of a seed round is to help your startup stay alive long enough to prove that customers and consumers love what you’re doing. Nobody is going to give you more money until you can prove a lot of people love what you do.
You have far more to do and far more to prove after you raise money, than you do before.
A seed round is fuel to help you do more, go further and do it faster. Do you honestly believe you’ll achieve more by working less — by having less focus or being less dedicated than you were before you had the money?
The adage that you should work smarter, not harder doesn’t apply here. You can always solve problems, create efficiencies, streamline your processes — but there are so many challenges facing small teams that there is absolutely no substitute for hard work.
This isn’t about working until you burn out. No investor wants to see a team implode. But as a founder, you must understand that your startup is your priority for the next five years. That means you won’t see your friends and family as often. It means relationships will suffer from time to time. Take a holiday when you feel you’re burning out. Get away, recharge your batteries. Take a weekend off and disappear offline — and when you return, expect to work 12 hours a day again, with all the intensity and determination you had before you raised the money.
I imagine a lot of founders I work with or have invested in are unsettled by reading this, wondering if I’ve formed these views with them in mind. Chances are I have — so let me spell it out, for you and for everyone else in your predicament: if you’ve slipped into working regular hours after raising your seed round, if you’re treating your founder position like regular employment, if you think you can work less after you raise money than you did before — I’m here to tell you your startup is already dead, and all you’re doing is wasting time and money while you slowly reap what you’re failing to sow.
To be clear, I’m not saying you have to sacrifice everything worth living for to stand a chance of success. I’m saying that if, as a founder, you treat investment as the means to maintain a comfortable lifestyle, and you expect to enjoy the same benefits as a corporate role with no responsibilities beyond the job description, then you’re going to fail.
Name a startup founder who was successful by taking it easy.
Either you want a 9 til 5 routine, or you want your startup to be successful.
Pick one. I guarantee you can’t have both.
Applications for Ignite’s London accelerator programme are now open. If you’re prepared to work hard to make your startup a success, we want to help you.