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Myth: if you are a startup, you should raise VC money. Fact: unless you are a very specific kind of founder going after a very large market with a very scalable & differentiated solution, raising VC money will likely kill your company. A thread:
1/ Happens more often than you think: you raise 10M, hire 20 engineers, onboard 100 customers. Then you realize your product captures only part of the overall value but you can't build the other features because you needed to get to a 20M ARR
2/ So you onboarded a lot of demanding customers who are eating all of your time up. So then you hired a lot of support folks but they took 4 months to ramp up; meanwhile your customers started complaining on Twitter.
3/ which ended up raising your CAC, churn and burn rates, reducing your ramp by 6 mos & unless you raise more now, you have to fire 25% of the work force because you hired them in expectation of a growth curve post the fundraise.
4/ This is the "life in the day of" of any founder. If you aren't maniacally focused, you'll miss the beat and company dies.
For every Flipkart and Freshworks, there's also a Zoho. Slow growth isn't bad. Craigslist ran for 10+ years before raising any VC $s (now 700M ARR). Atlassian, GoPro, MailChimp are all unicorns that raised none to little. Lots more examples.
VC is a very high risk asset class - it's best for founders who are risk takers. Go big or go home mentality. There are so many other alternatives for funding that exist today. Raise VC only when you are ready. Raise for domination.
