SaaStr · 2020-12-08
· 2003d
Founder Guide: Why Obsessing Over Investor Capital Loss Harms Growth
Jason Lemkin argues that early-stage founders should not worry excessively about losing investors' money, as it creates unnecessary stress and risk-aversion that hampers growth. True seed investors understand the risks they're taking, and founders should instead focus on reaching initial traction and avoiding zero cash date. Post-traction, the priority shifts to rapid growth rather than capital preservation.
Metrics in this report
High-Growth SaaS YoY Growth Rate
200%
typical
Example growth rate for $10M ARR unicorn-trajectory company
Initial Traction ARR Threshold
1-1.5$M
minimum
Transition point from binary outcomes to growth phase
NanoGram Devices Exit Value
50$M
actual
Sale price of author's first company
NanoGram Devices Time to Exit
12.5months
actual
Author's first startup exit timeline
Next Growth Phase Target ARR
10$M
target
Goal after initial traction is achieved
VC Fund Capital for Personal Investment
60$M
stated example
Author's capital allocation from current fund