Rob Go: 

In search of things new and useful.

Backwards Goals

Rob Go
April 16, 2011 · < 1  min.

I had dinner with an entrepreneur that I really admire a few nights ago.  He raised a small seed round pre-product and the early signs for the company are positive.  He made a very simple remark that I thought was worth repeating:

“If things go well, we’ll either just get to profitability, or raise a small amount of extra money to get there comfortably.  If they don’t go as well, we’ll think about talking to VC’s”

It was an eye opening statement, because most of the time, I hear the opposite:

“My plan is to make tons of progress so that I can raise money from VC’s.  But if I fail, we’ll raise a small round or bootstrap to get to cash flow breakeven.”

Once again, thinking about the goal of building something enduring, I much prefer the orientation of the first entrepreneur.  He wants to raise as little money as possible to prove that he has a valuable service, prove that it can be made repeatable and profitable, and then maybe consider ways to scale from a position of strength.  

We’re also lucky at NextView to have Niraj Shah and Steven Conine as venture advisors to the fund.  They are the founders of CSN stores, a monster ecommerce company that does hundreds of millions of dollars in revenue and never raised VC funding. 

In both cases, these entrepreneurs didn’t do anything all that strange, they are just trying to build rational and durable businesses.

Isn’t that the goal after all?


Rob Go
Partner
Rob is a co-founder and Partner at NextView. He tries to spend as much time as possible working with entrepreneurs to develop products that solve important problems for everyday people.