Prompted by a recent conversation with a founder.
Prudently, we created a scenario showing how to get the company to cash flow break even. The founder was surprised to see how quickly we could get there.
Slower growth always makes more sense than what VCs want.
Burn vs Growth
Put burn on one axis and growth on the other and you get four boxes:
Then the direction you’re going in matters. A company moving toward the Holy Grail is in a very different place than one drifting toward high burn and low growth, even if they sit in the same box today.
Why slower usually wins
- Slower growth also requires less burn. Less burn means more runway.
- It almost never makes sense to keep investing in a business with negative 📝Unit Economics. If each customer costs more to win than they earn back, growing faster just loses money faster.
- Sometimes growing faster merely saturates your channel. Past a point, more spend in the same channel buys worse customers at a higher cost.
- Sometimes it takes founder-led sales for longer than we’d like to admit.
Profitable growth keeps your options open. You can still raise venture capital when the numbers say it makes sense, but you don’t have to.