Author: Nick Tomaino Compiled: Zombiet

One of the most unexpected discoveries I have made since founding 1confirmation is that there is a negative correlation between initial fundraising and long-term success in early-stage startups.

As a founder, you tend to want to create a sensation by announcing that you have raised a large amount of funds. This can gain media attention and make you feel important. As an investor, for the same reason, you also tend to participate in such transactions. We did some of these things from the beginning.

The results indicate that all three failed projects we supported raised over $10 million before reaching Product Market Fit (PMF). And the 46 projects we support initially raised less than $10 million in funding, and they are still in operation, many of which are still thriving.

Why is this happening? There may be many reasons, but if I have to say two, it is that a large amount of funding may lead to a lack of focus and motivation before you have product market fit. Once you raise a large amount of funds, you will hire too many people and invest in too many different fields, which will distract your attention. Maintaining focus will become even more difficult. And you may feel like you have succeeded, losing the drive to desire success.

This taught me to always bet on the weak who are focused and eager for success, rather than the complacent leaders who can convince a few people to give them a lot of money.