Bhutesh Niroula’s Post

**The Illusion of Early Success: Why Some Startups Crash After Their Initial Triumph** Startups often celebrate early victories—securing seed funding, launching a minimum viable product, or landing that first big client. These milestones are crucial, no doubt. But they're not definitive indicators of long-term success. As a Venture Capital Investor & Founder, I've observed a troubling pattern: startups mistaking early wins for enduring triumphs. **The Body of the Matter** Early successes can be deceptive. They generate buzz, elevate expectations, and sometimes, unfortunately, lead to complacency among founders and their teams. The real challenge? Sustaining momentum post-launch and continuously innovating to meet market demands and customer expectations. It's about building a strong foundation—a robust business model that can withstand the test of time and market fluctuations. Moreover, securing initial funding is just part of the journey. Managing that capital efficiently while focusing on growth, scalability, customer acquisition, and retention are what differentiate fleeting successes from sustainable ones. **Concluding Thoughts** Celebrate your wins; they're well-deserved. But remember, the real work begins after the celebration ends. Stay focused on your long-term vision. Constantly iterate based on feedback and data-driven insights. And always be prepared to pivot when necessary—not just to survive but to thrive in this dynamic startup ecosystem. #startupgrowth #venturecapitalinsights #sustainablesuccess #venturebacked

Excited to share that Forecastr has officially closed its fourth consecutive over-subscribed funding round. There are definitely benefits to having a founding team that "knows their numbers" when it comes to running a startup company during a more challenging fundraising environment like the past couple of years. Co-Founders, Steven Plappert and Logan Burchett, were both fractional CFO's specifically serving startup companies prior to starting Forecastr. Their discipline and experience has been invaluable in operating a company that can control its own destiny, maintaining line-of-sight to profitability along the way. Over time, this has built confidence for existing investors .... and new investors as well. This latest round was prompted internally by existing investors who have had time to watch Steven and Logan systematically build and grow an incredible team, while efficiently operating the company. With most of the round already full from the beginning, it made it easy to open it up to several strategic investors, partners and others who wanted to get on the cap table as well. Perhaps the biggest sign of confidence is that the investors knew Steven, Forecastr's CEO, was taking off for three weeks right after the round closed to get married and go on his honeymoon. Steven is now back in the saddle, but I can say, the team didn't miss a beat while he was out. This is a sign of a great founder who has built a great company, when you have reached a point where the company can efficiently operate, and even move forward, even when you are not there. I've seen the same thing with Logan, who likewise has built an incredible team around him, so he can focus more on strategy and mapping out the long-term vision of the company (rather than getting mired down in the day-to-day). And .... speaking of long-term vision and strategy .... I can't wait to share some exciting things that are coming for our customers, partners and startup founders everywhere in the coming months!!!! 🙌 Stay tuned ..... The best is yet to come!!! 🚀 Forecastr - See the future!

What Stage is Your Startup Really At❔ I recently had a conversation with a startup founder who was raising a seed round—except, their company wasn’t at the seed stage. This isn’t the first time I’ve seen this confusion. Determining the right stage of your startup is essential for both your fundraising efforts and your growth strategy. Here’s a simple breakdown to help you navigate this: 🌱 Pre-Seed: This is where the idea takes form. You’re validating your concept, building a prototype, and perhaps seeking some early investment to get things off the ground. You likely don’t have a product-market fit yet. 🌾 Seed: You’ve got an MVP (Minimum Viable Product), some early traction, and you're honing in on product-market fit. You’re now looking for funds to scale your team, improve your product, and acquire more users. 🌼 Series A: You’ve proven there’s demand for your product. Revenue is consistent (even if it's small), and you’re looking to scale aggressively. Investors at this stage are interested in how you’ll reach more customers and scale operations. 🌳 Series B & Beyond: Now, it’s all about expansion. You have substantial revenue and a well-functioning business model. Funds raised here are often used for international growth, new product lines, or large-scale partnerships. Misidentifying your stage can confuse potential investors and lead to a mismatch in expectations. Founders—know where you stand, and make sure your pitch matches your stage! 👉 So, where do you think your startup is at? Comment down below! #StartupGrowth #FoundersJourney #SeedStage #StartupAdvice #VentureCapital

🚀 Exciting things are happening at Forecastr, and I’m incredibly grateful to be part of such an amazing team! If you’re a founder—or know someone who is—looking for expert help with financial modeling, FP&A, or in need of a fractional CFO, Forecastr is the solution you’ve been searching for. Let us help you raise capital, manage your runway, and grow your business! #startup #finance #founders #financialmodeling #CFO #Forecastr #entrepreneurship #growth

🚀 Exciting Insights from Carta 📈 Did you know that only 32% of US startups incorporated in 2023 opted for an equal equity split among founders? The analysis shows that as team size increases, so does the complexity of equity distribution! 💼📊 For two-founder teams choosing non-equal splits, one founder typically holds a median of 55%, leaving the other with 45%. But when it comes to three-founder teams, things get even more interesting – one founder might hold as much as 60%! 🌟 According to Harvard Business Review, the percentage of founders unhappy with their equity split increases 2.5x as their startups mature1. Y Combinator suggests that equal equity splits can strengthen relationships among co-founders, but they also caution that unequal splits might better reflect future contributions. At Jet Ventures, we understand that every startup is unique and a one-size-fits-all equal equity split may not be the best case for all startups. 🌟 #StartupEquity #Founders #VentureCapital #JetVentures #Innovation #StartupSuccess

More on my thoughts from earlier today from Eric Marcoullier - “Team and Dream” is no longer sufficient to get you pre-seed funding in most cases these days. Ask yourself how you can generate real proof points - revenue traction always wins out, but think about other aspects you can bring to life without raising a round: customer feedback is OK, front ends delivering Wizard of Oz-structure functioning solutions in the back end with signed up users coming to your tool consistently are another great mid-level step on the way to revenue. Be creative in your market discovery and initial traction instead of wasting cycles building investment decks and projections that are never right. In most cases, venture just doesn’t work like that anymore…

🕰️ VC-backed startups are becoming older 👴   Between 2019 and 2024, the median age of VC startups upon raising their next round, has increased on average by 30%.   💎 Peter Walker of Carta dropped this gem of an analysis on US VC-backed companies this weekend.   And it fully resonates with what we're noticing in practice torq.partners. There is a big shift in the lifecycle of venture-backed startups.    Instead, they’re aging through each funding round:   🌱 Seed companies raised in 2019 were just onder 1 year old. Today? Seed rounds often happen after 1.2 years or more of building.   👑 Series A takes the crown, with the median company being ~40% years older in 2024 when compared to 2019.   Putting this into numbers: the median Series A company in 2019 was barely 2 years old, in 2024 it was nearly 3 years old.   And this trend continues across Series B, C, and D rounds. Founders are now looking at a median 8+ years in the private market before reaching Series D. ❗ That's 2 years more than it was just 5 years ago.   Why the shift? 💡   Liquidity gaps are more often filled up with convertible securities, prolonging runway and therefore delaying the need for a traditional equity round.   A second effect (which is also enhanced by the aforementioned convertible instruments) is the "skipping" of a round.   🚀 Going from seed straight to Series B, bypassing A rounds if they can show strong traction early on.   What does this mean for the IPO market? While always much less prominent in Europe than in the US, now I think it will become even more rare to see small-cap tech firms get a listing.   🔑 So what are the key takeaways?   For founders, prepare for a longer journey.   For VCs, a traditional 10-year fund cycle might need a rethink.   Yori May Jitse Rupp #torqpartners #startupgrowth #venturecapital #mergersandacquisitions #IPO #funding

🌟The Start-ups Valley of Death: 📌The start-up "Valley of Death" term used in Venture Capitalists (VCs) to describe critical initial stage of start-ups. When start-ups are in their initial stage, they don't have any revenue or cash flows to run the show. The initial funding they got from VCs are the only source to run the show. This investment is used to launch the initial product/service, during this phase the product may not get the desired attention from consumers. It means that the first investments are made, the product is launched, but operating costs exceed the possibilities and profit. In such a situation, most projects can’t live to see the market reaction and die.   Valley of death is a part of a start-up's life cycle when the MVP (Minimum viable product) is already launched, but sales do not cover operating costs. At the same time, getting new investments requires a working business model. The inflow of cash slows down or stops, and the initial capital is already exhausted. As a result, a company is on the verge of survival. 📌5 common reasons behind start-ups' death: -   🔹 Failed product market fit. 🔹 Lack of Funding. 🔹 Issues with the team. 🔹 Strong competition. 🔹 Unwillingness to pivot. #ValleyOfDeath #StartupsJourney #EntrepreneurshipStruggles #InnovationChallenge #BusinessSurvival

𝗧𝗿𝗮𝗰𝘁𝗶𝗼𝗻: 𝗧𝗵𝗲 𝗖𝗮𝘁𝗮𝗹𝘆𝘀𝘁 𝗳𝗼𝗿 𝗦𝘁𝗮𝗿𝘁𝘂𝗽 𝗙𝘂𝗻𝗱𝗿𝗮𝗶𝘀𝗶𝗻𝗴 𝗦𝘂𝗰𝗰𝗲𝘀𝘀 In the ever-evolving landscape of startups and venture capital, one truth remains constant: traction is the golden ticket to easier fundraising. This past week, we've seen a flurry of activity where startups with solid traction secured significant funding rounds, while those without it faced uphill battles. Take Opkey and nOps, for example. Their recent successful funding rounds underscore the importance of demonstrating value to investors through customer growth and partnerships. It's not just about having a great idea; it's about proving that the market is responding to it. This is where the rubber meets the road for startups looking to scale. On the other hand, we've witnessed the challenges that companies like Bolt and Fluid Truck have faced. Leadership shake-ups and investor skepticism serve as cautionary tales that traction is not just about revenue but also about sound management and strategic direction. For emerging companies, remember that traction speaks louder than the most polished pitch decks. It's a testament to your startup's potential and resilience. As we continue to navigate the complexities of the startup ecosystem, let's keep our focus on building businesses that not only attract capital but also deliver on their promises to customers and stakeholders. And don't forget that traction implies reproducible processes. You will find as you gain traction your sales cycles becomes repeatable, deal sizes converge and so you can predict your business better and better.... #StartupFunding #VentureCapital #GrowthStrategy #BusinessTraction #StartupChallenges

I don't think that founders have fully caught on to the idea that "team and dream" is no longer sufficient to raise a Pre-Seed round. Here's what's changed in the funding landscape. Pre-pandemic, companies needed to be making at least $80k/mo ($1M ARR) in order to raise a Series A. Working backwards, investors were comfortable with the idea that in ~16 months, a strong startup should be able to 4X revenue, so $20k in MRR was considered pretty sufficient to raise a Seed round. Working backwards from THAT, early stage investors were widely comfortable with the idea that a startup could go from zero to $20k in MRR in 16 months. As a result, a great team with a killer idea in a huge market was frequently sufficient to raise $400k - $1M in a Pre-Seed round. Post-pandemic, that Series A goalpost is now squarely $170k/mo ($2M ARR) and Series A investors are much less likely to give leniency to founders who don't meet that threshold. There's simply too many startups at that revenue to invest in. As a result, Seed-stage investors have upped their standards to $40k - $50k/mo in revenue, again looking for a 4X jump in revenue before raising that next needed round. And now, those Pre-Seed investors are recognizing it's REALLY hard for most companies to 1) build a product and 2) figure out a viable business model and 3) go from zero to $50k MRR, all in 16 short months. So, by and large, they're expecting to see actual traction. If you're doing $10k - $15k/mo in MRR, that's a 3X-to-5X leap in revenue. Totally doable when you have a product IN MARKET with basic EXISTING TRACTION. It's scaling, not figuring out the basics. Investors don't care what you need. They don't care if you can't get to market without capital. There are far too many founders who can, thanks to no-code platforms, AI tools and larger and larger networks created through online communities. As much as I hate it, if you need pre-traction capital, Friends & Family is your best bet. Figure out how to get to market with $50k. Don't quit your day job prior to completing the Discovery phase. Shit, don't quit your day job before you have an MVP in market. Welcome to 2024. Investors aren't coming to help you fulfill your startup dreams. You gotta do that on your own. * As always, I'm leaving the Bay Area out of this. That place is weird and very few rules seem to apply. But whether you're in Denver or Seattle, LA or NYC, this post applies to you.