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How Much Should You Spend After Fundraising? - Gustaf Alströmer
- Running out of capital is identified as a primary cause of company failure.
- Future fundraising is characterized as highly improbable, with most seed-stage companies unable to secure Series A funding and most Series A companies failing to raise Series B.
- Operational decision-making is advised to account for the high likelihood that additional funding rounds will not occur.
- The standard timeframe to achieve necessary milestones before capital depletion is approximately 24 months, though some companies extend this to 36 months or longer.
- A critical risk exists in raising further capital immediately upon exhausting current funds, as this transition is unlikely to succeed.
- Spend on areas such as hiring and marketing may increase only after revenue generation begins, and expenditures must not exceed current income.