The Three E's of Entrepreneurship

We’ve said it before and given what’s going on with the forensics that DOGE is performing at the speed of tech, it bears repeating: investor money is not a founder piggy bank, meaning, use the funds as if it’s your hard-earned cash. There's not necessarily an unlimited supply of it, and the waiter always comes around with the check.

For those of you attempting to sort out how much to raise, here’s Y-Combinator’s Guide to How Much to Raise.? As the author points out, “Raising too little can put you in survival mode—slowing down progress, increasing stress, and forcing you to fundraise again sooner than expected. On the flip side, raising too much too early can lead to unnecessary dilution and misaligned expectations. The ideal amount? Enough to reach profitability if possible.”

Which leads us to the three Es, once you’ve secured funding: Execute, Execute, Execute.

The biggest mistake newly funded startups make is they over-hire. You’ve bootstrapped this long. Sure, it would be nice to have some more help, the operative being some. Hire on an as-needed basis and speaking of which, once funded, the focus of many, many founders is on raising the next round. It seems to us to be a knee-jerk reaction in tech.

Do not pass go. Do not collect $200. Or anything, next round, if you don’t pass the investor sniff test, which is traction? Revenue? This is, once again, where the three Es are critical:

Execute, Execute, Execute.

In other words, it’s time to build the company, although we prefer to use the word ‘business,’ as it’s time to build a business and it’s important to keep in mind that the more rounds you need to raise, the greater the dilution. Oh, right, there is that…

And not that more rounds will necessarily help you to make it to the finish line. Case in point, and there are many, Primary care player Forward shutters after raising $400M, rolling out CarePods. “Many Forward patients have posted on social media that they still, as of last week, have no access to their medical records and can’t get refills on medications,” Fierce Healthcare reported. $400M? And what about the patients who were left in the lurch? But, in traditional founder fashion, Forward founder Adrian Aoun announced that it was just a case of bad timing, and he’s ready to launch his next startup. Can't wait, what, eh, investors? According to the article, one of the problems with the company was their lack of focus on their customers/patients, which is kind of critical when you have a customer/patient-facing business.

You’d be surprised how many founders believe that they’ll need to raise round after round. And surprised at how many companies didn’t need to do that, yet managed to have healthy exits, meaning well into seven or eight figures. They might not have achieved unicorn status, but who’s to say that you will either and note to self: unicorn status is no indication of long-term success. Forward was a unicorn before they went to the way of well, the unicorns of the Bible.

Many founders believe that they’re doing something no one else has done before. You may be doing it differently, but it’s been done, trust us, and always good to have a superpower that sets you apart, aka a defensible moat, and the more impenetrable the better. Something to keep in mind as you execute, execute, execute.

One last important point: keep it simple. We’re not suggesting that you dumb it down. We’re saying that if there’s a simple solution to a problem you’re currently trying to resolve, go for it and save your dry powder/investor dollars for a more complex issue, or for a potential other problem that you’ll no doubt encounter in not too long a time and you will. And trust us, there is sometimes a simpler solution that might escape you at first blush.

Example: In the early days of the space program, NASA scientists realized that the astronauts would need a writing instrument that would work in zero gravity conditions. An everyday pen wouldn’t cut it, so literal millions were spent in development, and the pens are available commercially to this day: the?zero-gravity space pen.

Know how the then-Soviets solved the same problem?

They took a pencil.

Simple and functional. Onward and forward.

This editorial was first published in the weekly StartupOneStop newsletter. Sign up for it here: