"You have to think about, in the absence of investors, what would I do? Do I actually have a business that works? I don't think it's this binary state of Hey, I got to go all out on growth and I don't care about the other stuff, because you start a business to make money. You don't start a business to raise money. And at some point, you got to make money and you have to have a theory on how you're going to make money. Ideally, that theory should turn into reality sooner rather than later. And so, we need to have a theory on how we're going to make money and we need to have proof relatively, otherwise, you've proven that you can spend money." - Shiyan Koh
"Thinking about your customer segment is really important because you often see people who think everyone can use their product. That's true, not everyone is a good customer. You have to know who your best customers are and you fire the bad ones because the cost of serving them is not worth it for you. It's related to your free product, which is, that just because somebody uses your product for free, doesn't make them a good customer. Without proper planning, you may end up catering to a vast range of segments, making it challenging to assimilate diverse feedback. It will be hard for you to incorporate feedback not only because they all want different things, but also because you did not initially identify your customer base." - Shiyan Koh
"Taking a step back is if you're in a position where you have to consider recap or a down round, that means that your runway is probably relatively short. Your economic metrics are not what you forecasted two years ago, so there's a breakage between reality versus your expectations. That's a very important set of conversations you need to have internally, because when you go out there fundraising, and for sure the new investors are going to walk in and ask what you’re going to do differently. If you don't have that depth of conversation, then an investor wouldn’t have the confidence to come in." - Jeremy Au
In this episode, Jeremy Au speaks on down rounds and recapitalizations, startup failure patterns, and founder persevere versus pivot versus shutdown.
Keywords: Down Rounds, Recapitalizations, Startup Failure Patterns, Founder Persevere vs Pivot vs Shutdown, VC, Failure, Thought Leadership
