Little venture capital insight of the day. Drumroll, plx. The fastest ways of burning cash in a startup are:
1. Buying traffic for a new dotcom (read Fred Wilson on usage traction as a prerequisite for investment)
2. Scaling the sales organization without having scaled the sales process (read Max Bleyleben and Andy Blackstone)
3. “Field of Dreams” infrastructure plays: build it and they will come - or not (this is really my own phrase for businesses where you need to put in a whole lot of money upfront to build revenues, which is really counter the whole idea of early stage investing).
So there you have it.
1. Build a viral internet play where the sales magic by the founders can easily be transferred to salespeople and the upfront capital requirement is low (or can be staged).
2. ???
3. PROFIT
Simple, really.
One Comment
Nice post. That video is no longer available btw
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