There is such a thing as too much money. Contrary to popular belief. This plays an especially crucial role in the world of startups. What founders fail to realize is – the more money they raise, the more the accountability.
Raising too much money can cause a founder a tremendous amount of stress. The more the funding, the more sleepless nights. Investors want to see their money go to work. They want accountability for every penny you spend. It is safe to say that, when you raise too much money, your responsibility to show positive results (and FAST) is higher. Getting funded has a tendency to paint pretty pictures in the founders head. But the reality of the matter is, the problems you face as a startup with funds are more. Your team goes from founders to employees. It’s important to remember that an employee is not as committed as the latter. Many times, productivity reduces, sales go down, and the overall pace takes a backseat.
So when you map out the amount of funding you need, look at it realistically. If you raise too much money, you will have to showcase too many returns, in too little time. You want to spend more time building your business rather than consoling your investors.
