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If I Had a Million Dollars (What to Do With all The Money Your Startup Raises?)
…after my first round of startup financing.
I love that song from the Bare Naked Ladies. If I had a million dollars does not, however, refer to personal wealth in this case. It refers to the successful conclusion of a startup’s first seed round of financing.
Securing a good capital infusion is kind of like a mixed bag of good and bad. Many founders have to fight the urge to upgrade their offices, lease that crazy wild sports car they figured they would get when they ‘made it’ and hire a bunch of staff while others use the funds wisely to scale up their business.
I know a CEO of a failed startup although technically he still has the doors open but he has no employees. He had a great idea and seemed to be on track to live the American dream until he secured his first round of money. He went way over budget on a website and hired 5 C-level employees. As his mentor, I advised against it but he ignored my advice. See ya later!
It was not only financially unfeasible but the level of work was not sufficient to warrant that caliber of staffing. Within 6 months his funds had dwindled to next to nothing and when he looked to his investors they looked the other way. They had been watching what he was doing with their money and they were not…
