As these expansion stage companies struggle to raise capital, they are forced into a cathartic (and at times painful) process of self reflection. What is their sales process? Is it efficient? What is their unique value proposition? Is it really unique? What kind of company are they building? Will it be large enough to justify all of this investment?
And as a result, these companies are coming out of these hard raises with better businesses, better operating models (lower burn rates!!), and bigger visions to go execute against.
I think this is absolutely true as well. There is a real upside to such a struggle. And the flip side is something to think about as well: when it's so easy to raise capital, is it masking -- or at the very least, not surfacing -- some fundamental problems that would reveal themselves in harder times?Read more...