Raising Capital is not the Same as Succeeding

You can either take your pain up front or at the end. Raising money is the best decision in many situations, but more often when startups raise money it reminds me of a four-year-old failing the marshmallow test.

You see situations all the time where companies selling B2B software could easily increase their valuation 20-30% just by spending a couple weeks to build a database of 500+ leads to cold call, but instead they raise money first because they are too scared to validate their assumptions until they've already sold 15% of the company.

AskMen.com - $500k VC money - still alive since 1999 TheMan.com - $17 million - shutdown after a year http://en.wikipedia.org/wiki/Askmen.com