016. VC Treadmill

Raising venture capital is a treadmill. One that only gets faster and only gets steeper.

VC Minute – quick advice to help startup founders fundraise better.

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This is Rich Maloy with SpringTime Ventures, bringing you the VC Minute, quick advice to help startup founders fundraise better.  

Let’s talk about the VC Treadmill. 

One of the frameworks I have for thinking about venture capital I call the VC Treadmill, because raising venture capital is a treadmill. One that only gets faster and only gets steeper. If you choose to step on the treadmill, know that the expectation is that you will go on to raise increasingly larger rounds at successively higher valuations. 

You use the money that you raise at each round to hit growth milestones to show the next level of investors that you’re a great investment for them. And then you raise more money, spend more money, hit, higher milestones and so on, and so on. It’s a treadmill. 

I’m going to be coming back to this analogy quite a bit in coming episodes, but it’s important to remember that venture capital is focused on one thing and one thing only: growth. The path of a successful venture backed startup is one of constant growth fueled by capital. 

I’m not disparaging it. In fact, this is not a value judgment. I’m just making sure you know, what you’re getting into before you step onto the treadmill. 

Raise spend grow, raise, spend, grow. It’s the VC Treadmill. 


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Rich Maloy
Rich Maloy

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