Getting investor dollars is like a sugar rush. As soon as you have that cinnamon bun, you just want another one, and if you don't get a second one, you crash.
If there was one single mistake that crushed my startup five years ago, it was assuming I'd get any more money than what I got in the seed round. That underlying assumption was present in every decision I made.
I wasn't really running a business--I was trying to prove to some hypothetical future investor that I could run a business. It's the startup equivilant of Neo *trying* to hit Morpheus in the Matrix.
"Stop trying to hit me and hit me!"
It may not have been air that Neo was breathing but it is certainly Kool Aid that many founders are drinking. They're drowning in losses, maintaining blind faith that someone is going to come along and toss them a life preserver in the form of a venture round. Maybe yes, maybe no, but the right assumption to go on if you've taken a small round is that the money you have is the last of it.
This isn't about the Series A Crunch, which, by the way, is a made up media term whose existence has been quantitatively disproven. This is about building a business by figuring out real sales.
Sell product, not equity.
What would you do if I told you that whatever money you had in the bank was the last of the investor dollars? Would you cut someone? Who comes to mind first?
If someone pops into your head right away, should you be cutting that person anyway? If you feel like someone isn't indispensible or that you could easily upgrade them, they have no place on your team in a seed round. You have no money or time for dead weight.
How about dropping a product effort or two that seems like a longshot? Or asking a trial customer for money? Or raising prices?
This is all how you probably should be running this business anyway--with a sense of urgency about cash, that is, until you start making enough of it to pay for your overhead. Anything else feels like driving a car with bad brakes towards a cliff and waiting for someone to come along and build you a bridge.
Investor dollars are like an addiction--a drug addiction.
Revenues can be equally addictive, but it's more like a runners high where you feel good about your accomplishment and can't wait for that next sale.