In the latest episode of How to Unf**k Your Startup, I sat down with Andrew Dumont, a startup veteran whose entrepreneurial journey began at the tender age of 18 when he co-founded Tatango, a group text messaging startup that raised an angel round and set the stage for his future endeavors. Since then, he has been a driving force behind numerous successful startups, wearing many hats along the way.
From his time as a key player at betaworks, a startup studio that has invested in household names like Tumblr, Medium, and Kickstarter, to his role as CMO at Bitly, where he built and led the revenue and go-to-market teams, Andrew has demonstrated a knack for building and scaling companies. Recently, he served as the CEO of Stamped, a SaaS company in the e-commerce space, and also led multiple brands under the umbrella of Tiny, a publicly-traded holding company. Now, as the founder and CEO of Curious, an investment firm and holding company, Andrew is on a mission to help other entrepreneurs navigate building their startups.
Andrew shared his unique perspective on the venture capital landscape, exploring the hidden pitfalls that can accompany venture funding, the importance of aligning founder and investor incentives, and the mental and emotional toll that the constant pressure to scale rapidly can take on both founders and their teams. But perhaps most importantly, our conversation also shed light on the often-overlooked alternatives to the traditional venture capital path. From bootstrapping to revenue-based financing, we delved into the strategies and approaches that can help founders maintain control over their vision, build resilient and profitable businesses, and ultimately achieve their goals on their own terms.
Whether you're a first-time founder just starting out or a seasoned entrepreneur looking to get in the game once again, this episode will give you a lot to chew on. Tune into the full episode here:
For now, I’ll going to break down the four points that stuck with me after our conversation:
When founders and investors aren't on the same page, it often leads to unsustainable growth tactics and poor decision-making. Andrew puts it this way:
"The recent trend that's making things even more complicated is that founders are asked to build a venture-scale or venture-growth business while also having a path to profitability or sustainability. You're asking these businesses to be both venture-growth and profitable at the same time, which makes it even harder."
This push and pull between rapid growth and immediate profitability puts a lot of pressure on founders. They might end up making choices that look good in the short term but don't set the business up for long-term success. It's a tough spot to be in, and it can lead to a never-ending cycle of chasing unrealistic goals and burning through money.
When startups are constantly changing direction to keep investors happy, it can wear down the team and slow down progress. Andrew shares:
"The biggest feedback I hear from team members within venture-backed businesses is that nobody sticks to the plan. Nobody stays on the same vision long enough to actually realize it. That movement within or outside of the original vision creates a lot of fatigue within teams."
If teams are always being told to switch gears and can't see their hard work pay off, morale and productivity take a hit. It's hard to reach your startup's goals when everyone is feeling frustrated and burnt out. Consistency and a clear direction are key to keeping people motivated and engaged.
Bootstrapping, or self-funding your startup, can lead to the best outcomes for founders in terms of control and financial success. Andrew suggests:
"If you're talking about founder outcomes, the best possible outcome is to bootstrap a business, if you can. When you're speaking purely to what creates the best outcomes in terms of autonomy and financial success, I think bootstrapping is the obvious winner there if you can do it and reach scale."
By putting your own money into your startup, you can maintain control over your vision and decisions while building a profitable business on your own terms. Bootstrapping makes you think carefully about how you use your resources and pushes you to focus on creating value for customers and bringing in revenue from day one. It might take more time and effort, but it can lead to a more sustainable and rewarding outcome in the end.
There are other ways to fund your startup besides venture capital, like revenue-based financing or small business loans. Andrew points out:
"There are a bunch of ways to finance a business. You can continue bootstrapping, take out revenue-based financing, or even secure a small business loan."
These options let you get money without giving up ownership or control of your company. You can grow at a more manageable pace while focusing on building a strong foundation. With revenue-based financing, you get funding based on a percentage of your future sales, so your interests and the investor's interests are aligned. Small business loans often have better terms and repayment plans compared to venture capital, so you can keep ownership of your company.
.svg)
