♞ When to move on...

In partnership with

When to move on…

Last week, I had a long conversation with a subscriber who was feeling deflated after nearly three years of struggling to raise. They wanted to know if they should move on from their company or continue trying to grow it. Here is my advice:

The first step when you are in this position is to make sure you are asking the right question. Failing to fundraise often leads people to think about moving on from their startup. The problem is that many founders ask themselves, “Can I fundraise?” and if the answer is “no,” then they shut down their startup.

In reality, you need to ask yourself, “Does my company have potential?”. If the answer is “no” then you can shut down your company. If the answer is “yes,” but you are struggling to raise, then you need to dig deeper into what precisely the potential of your company is. Very likely, you are in a situation where your company should continue but only as a small business or bootstrapped startup.

How do you answer the question, “Does my company have potential?”

This is very difficult to answer objectively, especially when you’ve been working at a startup for an extended period of time. It becomes even more difficult when you already have users and some type of product/market fit because you have made some level of progress that many others never get to. The reality is, however, that only a small percentage of companies that get initial users make it long-term. Sometimes, your market just isn’t big enough, there are too many competitors, or the product isn’t scalable.

Here are some questions that you should investigate when determining how to move forward:

1. Are our customer’s requests impossible? If you have users and you are talking with them and the changes that they want to your product/service aren’t something that you can deliver, then you might be limited by that deficiency. If you’ll never be able to provide the service they want (or the barrier is extremely high), then your company likely doesn’t have long-term potential.

2. Will you be profitable? If you don’t see a path to profitability then without VC funding you aren’t going to survive. In this case if you’ve been struggling to raise there might not be another path for your company.

3. Are there significant legal or regulatory challenges? If there is a high regulatory risk involved in your company, it is likely scaring away investors and can’t be overcome without significant funding. This puts you in a position where the company lacks any path to realizing its potential.

With Deal Sheet you get curated, actively investable startup opportunities sent once per week.

Deal Sheet offers the best (and actively investable) venture capital investment opportunities directly to your inbox weekly. Deal Sheet subscribers have already received investment opportunities alongside Kleiner Perkins, Naval Ravikant, General Catalyst, Andreessen Horowitz, Khosla Ventures and more!

The Deal Sheet Co-Founders Alex Pattis and Zach Ginsburg are the global VC Syndicate leaders with over 700 investments closed and over $200m invested into startups. Additionally, over the last five years, Alex & Zach have collaborated on deals with over 50 VC leads who have collectively put together well over 1,000 startup investments.

Sign Up Now

Are you looking to grow your business? Here is how I can help:

📢 Promote your startup to 2,000+ VCs including investors from a16z, YC, Techstars, Rarebreed, Sequoia and more.

📱 Book a Strategy Call to get 1:1 feedback on your pitch, pitch deck and/or fundraising strategy. (If you need general startup advice, then reply to this email, and I’ll let you know if/how I can help.)

📺 Access FundraiseOS, the ultimate fundraising course with video lessons and practical worksheets helping with everything from deciding how much to raise to understanding a term sheet.

💸 Promote your product or service to 100,000+ entrepreneurs.

🌐 Connect with me on LinkedIn or X (formerly Twitter) to get access to new content about startups, fundraising, venture capital and more every day.

Onwards and Upwards,

Liam Gill