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.

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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