Many young-age founders think raising early on from a tier 1 fund guarantees success against others. On the contrary, taking an early cheque from a tier 1 fund limits your option.
Some of the things that will happen:
- Your champion will leave the fund. You will become an orphan.
- Not enough growth. You will be left to die slowly.
- Tier 1 fund will not lead and throw a mixed signal to other incoming investors.
What can founders do?
- Focus on fundamentals and not get carried away by who is on their CAP Table.
- Focus on the team and building and delighting customers.
- Avoiding noise, PR, and self-promotion.