Hi everyone,
As you can probably tell from the title, I'm one of the cofounders of a VC backed startup. I've been working on this startup for about three and a half years, but we've pivoted a couple of times and have been working on this particular iteration for about two of those years.
In that time we've raised about $10m, have about $7m left in the bank, and are a team of about 15. We are making basically zero revenue (a rounding error amount), and almost for the whole of the three years that has been the case. I find my cofounder very hard to work with at this point - for a variety of reasons.
I feel very tired, and it has been a huge slog to get this latest version of the product out and I have little confidence it will meaningfully impact the metrics that matter i.e. revenue and retention.
But at the same time, I know that I want to build another startup.
Does anyone have any good mental models for how I should think about whether or not to stay at this startup any longer? I feel a sense of obligation to our team, and obviously we have a reasonable amount of cash in the bank (investors want us to return this), and I feel obviously worried about leaving without a clear plan on what to do next.
Would appreciate any thoughts!
Thanks!
But really, if you have no revenue, and no passion - be open with your cofounder. Dwindling along until you use all $10m isn't fair to anybody involved really. You must both know this; who decided, and was it on purpose? And if investors want it back, it might be a good time to decide on this.
At the same time you have space to move. Most startups in the US are default dead for much longer than you have spent in the market now, especially those that raise $10m (you hire bigger teams).
Be very realistic about the end consumer and their problems and think from that angle. Is there an alternative. Do you possess the motivation to focus on it. Are you on the tech side?
One thing that might be tricking you or your cofounder is the $7m - you might see it as a strength. Indeed it is an "asset", but as to mental models, read what Jason Cohen says and consider if it really is a benefit, or only a benefit if it is used wisely. Where does it, your product, your expertise and any industry news fit into this landscape? https://longform.asmartbear.com/swot/
And don't worry too hard. You can try again. You have given employment to a dozen people and probably helped shape them. Contrary to what you will hear, if you were not the face of fundraising, this will likely not prevent future fundraising, but you will need to tell the honest story. Waking up to this not working at this point is not the worst - you are doing well on that. What I will say is that 15 people who know how to work together, combined with good morale and clear leadership, could certainly still pivot to success.