Startup Funding

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What Kind Of Experience Do Startup Founders And Founding Teams Need

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What Kind Of Experience Do Startup Founders And Founding Teams Need

We’ve shared the PEP model for founding teams before - Passion, Experience and Persistence. Since we’ve already covered the 2 Ps (click above to read about them), we thought it was time to talk about Experience.

There is a myth in startups that startup founders are young people, fresh from education, and looking to disrupt the world. We see icons like Bill Gates, Mark Zuckerberg, and Steve Jobs and think, “You have to be young to start a company.” There are notable startup founders who are young. But the average age of all startup founders is 42 years.

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Funding 101 for Startups

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Starting a business requires navigating many kinds of uncertainties. Startups need to take many detailed steps, including: 1) Selecting a market, 2) Researching customers’ needs, 3) Picking a name, logo and domain name, 4) Creating a website, and 5) Starting to produce your offering and marketing it. In addition to time and effort, all of these steps take money. Every new business has to think about where it is going to get capital. When starting a business, the key is to get the kind of capital that matches the kind of business you are starting…

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Right-sizing Startup Funding

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Right-sizing Startup Funding

In 2013, Fred Wilson (AVC) of Union Square (US) Ventures asserted, based on their portfolio’s data, that “the amount of money a startup raised in seed and Series A funding was inversely correlated with success. “ That is, the more money a startup raises, the more likely it is to fail. Or the less money it raises, the more likely it is to succeed. At least, that’s the pattern supported by US Ventures’ data at the time. 

CBInsights tested this assertion with their own data in 2013. They found “no relationship between the amount of money raised and success.” In other words, funding levels were not related to venture success or failure.

Many people assume that raising more money is better and that more success will follow raising more money. These studies suggest that it’s not about the total amount of money raised. It’s interesting that neither dataset supports the idea that more money = more success. It will take more time and data to know which is correct. 

We would argue that the strategic question is not how much you can raise - it’s about raising the right money at the right time. Start with the questions: “Do you raise money at all?  If so, how much and when?” Here are 3 tips for right-sizing your funding: