Reader mail: “What about funding growth?”
Jason Fried
44917

The ‘aggressive raise and grow’ strategy is based on critical assumptions:

  • That you will reach your growth targets (assumptions: sales revenues, operating costs, competitive responses)
  • That you will be able to repeatedly raise new rounds (assumptions: favorable valuations and investment environment)
  • That you will be acquired before the money runs out (assumptions: acquirers are interested and able)

If any of these assumptions are wrong, and you can’t correct your course, then the Preferred Shareholders (who funded you) will take over and you will lose your company and personal investment.

So you need to be really clear about your Assumptions, especially around Markets and Operations, and base them on research, real data, and professional expertise (CB Insights Startup Post-Mortems consistently show that the vast majority startups fail for Market-related reasons).

Sadly, tech founders seldom do this…