99 Startups Monthly Newsletter - September 2024
Since I joined 99 Startups two years ago, I have talked every day with different founders. There are many common mistakes they make when raising capital and I still see them make them. I will make a summary of the most common:
Not all of the founders are full-time: We want to bet on the founders who are in love with the problem they solve and are 100% committed. Creating a startup is very hard and requires 100% focus and commitment.
Outsourced technology: One of the main differentiators among similar startups is the technology they use. If they have outsourced their product or technology, probably a good technical team will enter the market and win them by moving faster with a better product. That’s why it’s important to have a strong technical team.
Diluted cap table in early stages: The founders may not be motivated long enough to stay for the long run in the company if things shake out.
Short-term vision: Probably because the team is not in love with what they are doing and are only trying to profit from an exit in the short to medium term, which can result in a much lower return for us.
Lack of transparency in the process: This may be indicative of the founders lying or hiding something.
High burn rates with poor unit economics: Focused on accelerated growth in early stages rather than healthy growth.
Romantic relationships among co-founders: It may not be a dealbreaker, but is a yellow flag. Usually, when the founders break up, the company breaks up.
Requesting NDAs: That sends us signals that the team believes that they can be copied by someone else, and that they are not confident in the team to be the best to execute their solution.
These are some of the most common mistakes founders make, but there are many more and this does not mean that by doing any of them, you will not be able to raise capital, but for sure it will be way harder.
Because of these problems that we have repeatedly seen over the last two years, I have decided to open a space to give feedback to founders in any aspect they need. We started it a few weeks ago and have had positive results.
That is why we will continue to do it in the next three weeks. It is a 30-minute space, on Wednesdays and Thursdays.
If you are creating a startup and have questions regarding anything related to raising capital, please feel free to schedule a meeting with me so I can give you feedback.
This is my Calendly where you will find the available spots.
News about our portfolio companies:
Kunzapp enters the Ecuadorian market with the payment tool Kushki.
Great companies we have recently reviewed:
YaVendio: Scaling and helping sell digital SMEs through AI Agents.
Life SI: Working on 3D printing human tissue for transplants.
Storytime: Generative storytelling for small and big families.
Recommendations of the month:
Can't Hurt Me: Master Your Mind and Defy the Odds - David Goggins: Through his personal story, David gives us a path to overcome our fears and reach our full potential in any life’s aspect.
A framework for finding product-market fit | Todd Jackson (First Round Capital) - Jackson, partner at First Round Capital, played a crucial role of Product at Dropbox, and shares his insights into PMF.