Rich kids have one very important advantage in life: they see from early childhood how to find leverage and use money to free up time.

It's a crazy important skill for VC-backed founders and part of why the learning curve can be so steep for non-rich people (like how I grew up). When I was little my dad taught me how to fix a toilet. "You never want to pay $500 for something you can easily do yourself."

And while the ability to do labor is hugely valuable, the resource I was ALWAYS taught to conserve was money. It was part of our DNA on a single income.

People talk about tech debt a lot. I tend to align with the belief that you should take on as much as you're able pre-PMF and work back from it over time.

But I want to talk about growth debt. Growth debt is what happens when you do things you wouldn't normally do just for growth. Every single successful company has some of it (just like tech debt).

It's not inherently bad, but it's not inherently good either.

First, what it is:

Quick story about the worst VC meeting I've ever had. [Note: I've heard MUCH worse, so I do think it's important to call out this was unpleasant and not horrifying, and for that, I'm grateful.]

It's September 1, 2018. Catch hasn't raised any venture, and Andrew and I are green. The partner we're meeting with tells us he's bringing in another partner to join who has invested in portfolio companies "very similar to Catch" to be an expert and ask thoughtful questions.

No red flag. Always great to get more partner attention. Hooray for Partner #2.

There was a lot of talk a few weeks ago about how this hard time would sort out bad startups and destroy those that are more vitamin than painkiller.

I understand that point of view, and I agree with part of it. Contractionary cycles are an important part of strong growth.

1/ I also was stunned by ridiculous valuations and companies whose products seemed cheap copies of each other raising hundreds of millions of dollars after a few short months of existence. Almost all of which were founded by (mostly white) men.

Scooters come to mind.

2/

Omg if one more SF VC says current status “proves” remote work is the future (full stop) I will lose it. What about the current situation makes you think it is working? 3.28M filed for unemployment last week. Hundreds of billions of dollars evaporated out of the economy. Productivity at historic lows. Anxiety exploding. Now, let’s assume you’re talking only about the software companies you spend all your energies on:

A year ago today, we were almost out of money. We had a consulting client who owed us ~$450k, but was trying to negotiate down on the amount, despite work being fully delivered in September. Then, "the holidays" hit.

1/ Everyone at this client company evaporated for at least two weeks. Our burn rate was high-ish because we were building across three different regulated industries (banking, investment, insurance). Our funds kept trickling out. Traction existed but was not entirely compelling.

2/