

Should startups focus on profitability or not? [2011] - robot
http://www.bothsidesofthetable.com/2011/12/27/should-startups-focus-on-profitability-or-not/

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mindcrime
This is a perfect example of how the interests of VCs and the interests of
entrepreneurs can be (and often are) misaligned.

 _Because of the circles I run in I tend to meet many people who eventually do
want to build large companies and therefore do want to eventually raise VC and
“go big.” But they want to do it with leverage._

This ignores the scenario of "We plan to 'go big' and build an immensely
scalable company, but we aren't worried about doing it super fast". And that,
of course, is because that scenario doesn't work for VCs, where their funds
are almost always time-boxed.

As an aside, I understand that this is one reason that it's a good idea to
raise from brand new funds when possible - they have the maximum portion of
their lifespan still in front of them, so you get less "time pressure" from
the VCs. If you raise in year 7 of a 10 year fund, you'll be under a
tremendous amount of pressure to have an exit in 3 years.

