Those experienced co-founders could not see there is no way of keep in business? I really doubt. But I totally understand they will not be the kind of person that F solve things. That is not their thing
I cringe when I hear of burn rates of 45k a month. I don't understand how people can justify this kind of gamble. I made prototypes, invented, patented and setup manufacturing for less than 15k. I like people like me that are so versatile that they can make something from very little. When I begin selling, my burn rate will be about 2k a month, because I'll do everything out of my three-car garage with a part time employee, until profits are strong. I'm a numbers guy. What are the expenses and what are the profits. I don't listen to people's sales pitch; and I do not like posers. I only look at the numbers and how good they are with money. Anyone with pie in the sky dreams and a burn rate of 45k a month, should think things through and plan out their next venture and then plan some more. When you take other people's money you better not lose their money. That would be stealing! Let that sink in. That would be stealing!!!!! SphereMotor, the future of electricity
From my perspective as an investor, the reason for the high burn is the attempt to reach high growth. They were an actively operating business, not developing products. That money was mostly going to sales and marketing, as it should. As an angel investor, I want to see 50x returns on my investment in under ten years. Achieving that is rarely cheap. Scraping by to possibly return a fraction of my investment does not make economic sense for me. Venture investment models are all based on what's called the power curve. A few big winners drive all the returns. Every investment must have the potential, and be trying hard to be, one of those big winners. That means they will have a high burn rate. If I was investing in your company, I would not want you running out of a garage using part-time employees while you try to grow. I would want you to take significant investment, and spend it, to grow like crazy. I would not expect you to make a profit for several years because everything is going back into growth. What you describe is more like a bootstrapped business, a completely reasonable approach, and often better for the founder. She specifically built a venture-backed business. It just works differently.
@@FeeltheBoot I kind of see your logic. We are all different. I am very conservative. Low bills and low or no dept, equals low worries. I also believe in Murphy's Law. Anything that can go wrong will go wrong. So, striving to always be on solid ground and ready for the rug pulls is always the goal. Some people like the Go Big or Go Home Model. I've always seen it as the, Go Bust and Go Broke Model. But every problem has a different solution, and every business has a different plan of action. I like the Warren Buffet model. You don't always have to win, but don't ever lose. Your reply is greatly appreciated. SphereMotor
