Just because you are VC funded does not mean you have unlimited funds

 In venture capital

I was at an event recently when I heard the following during a presentation:

“we are VC funded so don’t have to worry much about hosting costs…”

Having worked for about 6 startups over the last 10 years (none of them VC funded incidentally), this was probably the most arresting thing I have heard all year.

To be fair, it was not the CEO of the company talking, but what was perhaps more worrying was that the Gen Y chap presenting probably believed this from something that has been said at a more senior level.

It reminded me of back in the late 90s and early 2000 when dotcom valuations were sky-high and Wired, Business 2.0, Fast Company and Red Herring (remember the last 3?) regularly published 200+ page editions filled with the promise of blue sky investments.

Having worked in the start-up space for so long, I know first-hand what can happen when you don’t have your costs controlled, or have inexperienced management who are making mistakes for the first time with a large amount of funding in the bank.

I was involved in an Australian start-up a few years ago (personally invested my own money also), and saw a company with a bright future, some smart technology with a $MM investment struggle, the result being the company was wound up and the IP sold for a song.

So when I hear “we’re VC funded so we don’t have to worry about costs”, I immediately sense a company that is not in control of their own destiny and reliant on other people for success (or the hope of it).

My strong advice as a multi-startup veteran is if you are Gen Y and are in a start-up, treat the money invested by the VCs or Angels to get you started as if it was your own money invested and spend it wisely.

While you are here ...

Did you know that Andrew also speaks regularly on topics such as this at conferences and events around the world.

You may wish to view Andrew's extensive speaking portfolio at practicticalfutur.ist.

If you enjoyed this blog post you may like other related posts listed below under You may also like ...

To receive future posts you can subscribe via email or RSS, download the android app, or follow me on twitter @andrewgrill.

About 

Based in London, Practical Futurist and former Global Managing Partner at IBM, Andrew Grill is a popular and sought-after presenter and commentator on issues around digital disruption, workplace of the future and new technologies such as blockchain. Andrew is a multiple TEDx and International Keynote Speaker.