The Startup Money Brain Drain

The painful but necessary part of every founder’s development
Feb 27, 2022 5:12 AM
Feb 28, 2022 5:51 PM

The fundraising stage is the least creative part of the startup journey. Sure, you’re getting advice (most of it terrible), but mostly you’re hearing no and thinking endlessly, desperately about money.

Same if you’re bootstrapping. Ramen profitability is a tough spot. You’re bringing in money, but you’re constantly battling between funding growth and wanting to upgrade your own lifestyle, just a little.

Self-esteem? Good one.

When you are worrying about money, it’s extremely difficult to be creative from a product development perspective. Quoting PG:

At any given time there tends to be one problem that's the most urgent for a startup. This is what you think about as you fall asleep at night and when you take a shower in the morning. And when you start raising money, that becomes the problem you think about. You only take one shower in the morning, and if you're thinking about investors during it, then you're not thinking about the product.

As much as I want to say I don’t recommend it, the desperate need for money is an important part of every startup founder’s personal development. It’s one thing to read about door desks, and it’s another to live financial struggles firsthand.

Maybe it won’t kill your self-esteem, but it did for me. Eventually, I built mine back up upon a stronger foundation.

The experience is humbling, but the end result is you learn how to do more with much less. Because you’ll learn, the hard way, what inputs actually generate outputs. And when you are funded (or better yet, actually turning a profit), you’ll continue to spend wisely.

This is the essence of entrepreneurship, according to Jean-Baptiste Say:

The entrepreneur shifts economic resources out of an area of lower and into an area of higher productivity and greater yield.