I’ve worked with over 600 different technologies and more than 300 entrepreneurs. Almost all of them who are trying to breathe life into a new business think they have a money problem.
The funny thing is that as I look back on my own ventures and realize that, if anything, my problems stemmed from too much money rather than too little.
Too much money is not always a good thing
My biggest mistake has been to see some initial success with a venture and then go full bore - scaling up far too early. Had I had less money, and more street-smarts, I would’ve held back.
So often, that initial success turns into a nightmare if you scale up too fast. In my first startup, at age 15, the product was defective and was returned by all of my customers. In several businesses since then, sales went very well and I hired 10, 20, as many as 30 salespeople, only to have all the problems of fulfillment and delivery that were not anticipated make the whole thing blow up in my face. Laying off 30 people is no fun. I don’t plan to make that mistake more than once.
I also remember the time that I raised $14 million in venture capital from some very prestigious firms. One of the name partners, a man who is extremely famous, even put some of his private money in. And then they pressured us to spend the money aggressively. I’m not kidding. As twisted as it sounds, we had to have a "burn rate" that was high enough to justify that fat bank account.
In reality, though, most people don’t rela...
Author: Richard Geller
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