Petar, this is a sharp and necessary piece. Too many founders treat fundraising as validation when it is really just a financing-fit question.
The insight I would add is that fundability is not only about the startup. It is also about investor-fit discipline. The wrong investor can make even a fundable company look unfundable.
Venture capital is a tool, not a trophy. That distinction alone can save founders months of wasted motion.
The section on economics is interesting. A business that only works when growth is cheap and endless is not a venture business but just a bet on conditions staying favorable. I have seen beautifully constructed decks collapse in diligence on exactly this point, not because the product was wrong but because the path from spend to scale to leverage was never actually there.
Wow!!! This captures the important truth; capital follows business fundamentals, not the other way around. A company that can survive without venture is often in a stronger position when it chooses to raise.
must read for those looking to raise, to pre-screen yourself wether your business should be vc-backed:
- Venture deals by brad feld
- Secrets of sand hill road
Exactly. The real first step is figuring out whether the business is built for VC at all
Point 4 on traction is the one that matters.
It’s very easy to show movement and still not have real proof that people care enough.
That’s where founders can fool themselves for longer than they realise.
The numbers look good and everyone wants to believe it’s working.
I wrote about that gap too 🔗 https://millennialmasters.net/p/motion-vs-traction
That gap between motion and real traction is where a lot of founders get caught
Petar, this is a sharp and necessary piece. Too many founders treat fundraising as validation when it is really just a financing-fit question.
The insight I would add is that fundability is not only about the startup. It is also about investor-fit discipline. The wrong investor can make even a fundable company look unfundable.
Venture capital is a tool, not a trophy. That distinction alone can save founders months of wasted motion.
Completely agree
A company can be excellent and still be the wrong shape for outside capital.
Exactly
Build a company that’s worth backing, love that line
Glad that line landed. Backing should come after the company proves real fit
exactly!
The section on economics is interesting. A business that only works when growth is cheap and endless is not a venture business but just a bet on conditions staying favorable. I have seen beautifully constructed decks collapse in diligence on exactly this point, not because the product was wrong but because the path from spend to scale to leverage was never actually there.
If the economics only work in perfect conditions, the model is too fragile
Wow!!! This captures the important truth; capital follows business fundamentals, not the other way around. A company that can survive without venture is often in a stronger position when it chooses to raise.