Last month, Sean Percival stepped down from his CEO position at children’s clothing subscription startup Wittlebee.
Percival successfully raised a $2.5 million seed round from Google Ventures, Matt Coffin, Crosslink Capital, and Rincon Venture Partners last April. But when it came time to raise a Series A round, he couldn’t seem to get investors to hand over more money.
Percival gave up his chief executive role at his own startup for a few reasons, he writes on his blog.
The main reason: He ran out of money. One “critical mistake,” he says, was rushing Wittlebee’s Series A round in Q4 of 2012. Percival doesn’t blame his “failure” entirely on that, but found it hard to regain his footing with the business.
Here’s a summary of Percival’s advice for entrepreneurs in between their seed round and Series A round:
- “Ignore the cries for more traction, especially when it would hurt your business or deplete your cash to satisfy those demands. Buy yourself more time and make the investors wait.”
- Build a sustainable business. Don’t worry about providing too many, if any, perks. “A loyal team member is going to stand by you even when times are tough and the snack cabinet is bare.”
- At least consider joining a startup accelerator (Wittlebee was part of Los Angeles-based technology studio Science). “Just do your research and find the one that is right for you. Most of all you want one that is founder friendly (Several are not), has juice (the ability to fuel or fund your business), and has demonstrated some measure of stability (most are a shit-show).
- Be transparent with your employees about the challenges the company is facing.
- Use pseudonyms on the Internet to vent when times get rough.
- realise that sometimes it’s not possible to fall back in love with your startup. “If that’s the case, it’s really your duty to get out of the way. Intense love and passion is what builds great companies, and without it you really don’t have a chance.”
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