There is a clear impression among NZ entrepreneurs that Silicon Valley-based start-ups get big cash from VCs and spend like crazy. Reality couldn”t be more different. The WSJ this morning throws light on prevailing the mentality.
Some great quotes throughout:
“Cash is queen these days,” says Mr. Thomas, who estimates Sharpcast can last another two years even if it doesn”t produce any revenue. “Fiscal discipline is harder to teach later in the life of a company, and we want to be the last guy standing.”
“Indeed, while tech start-ups are raising less funding these days — an average of $8 million each time, down from $11 million in 2000 — they are making the money last longer. According to research firm VentureOne, tech start-ups in Silicon Valley now survive an average of 17 months on a single round of funding before needing to raise more money, up from just 10 months in 2000. (VentureOne is a unit of Dow Jones & Co., publisher of this newspaper.)”