Building a product people love is a challenge in itself. Now add the need to earn enough money from Day 1 to cover all the development costs, all the experiments, and have a reliable income that will allow you to convince engineers and designers who will be building it to join you. Capable people always have better offers at hand and need to know you will be able to pay them.
Venture capital removes a lot of these hard questions or at least moves them a few years into the future period. You can use investors’ capital to actually build something and test if it’s appealing and can make money. But in the tech ecosystem, people rarely end with just one investment. Most startups instead fall into a running wheel where they raise new rounds every 12-18 months and focus on growth, not pure revenue and certainly not profit. And I see very specific problems with that approach and I believe a significant share of founders would be better off on a different path, a path that we don’t really have a good name for, but a lot of companies have chosen it.
