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KA

Kofi Ampadu

05/06/25

@ a16z

It's rare for a company to be profitable from day one; outside funding plays a big role in sustaining a company while it grows.

Video

a

What’s the Right Way to Fund Your Startup? | TxO Start Up Hotline

@ a16z

What’s the Right Way to Fund Your Startup? | TxO Start Up Hotline

05/06/25

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CL

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09/20/19

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It's exceedingly rare for a company to raise a small amount of money and never need more funding, as companies typically require additional capital to grow.

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Not every business needs to fundraise; many successful companies have built profitability without raising money.

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In the early days of a startup, survival is crucial; as CEO, you're either making money, saving money, or raising money.

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The narrative around companies that raised excessive funds but are now becoming profitable is shifting, suggesting a positive outlook for founders as they can achieve profitability without additional capital.

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In the early stages, most companies focus on R&D, leading to zero revenue and high expenses, which is typical for startups.

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Successful companies generate revenue from customer demand, which drives their growth, rather than relying solely on fundraising.

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Historically, successful companies were built with much smaller seed rounds, indicating that the current funding environment may be skewed and that adequate funding can still lead to success.

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Just because a smart investor has invested in your company doesn't mean it's doing well; fundraising rounds can happen even for struggling companies.

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In the early stages, it's important to be cautious with spending and have a plan to reach profitability, even if you're reinvesting revenue into growth.