How A Founder Can Think Like An Investor At The First Outside Round Of Funding


Editor’s note:Paul Bennetts is a VC at AirTree Ventures – $60m VC fund in Sydney Australia. Paul blogs at

The mean case can cost a founder up to $200K in self-funded investment and up to 24 months before they are ready to test outside funding. It is a nontrivial investment, in both capital and time, to test a hypothesis of product-market fit. And in many instances, a founder can fail to give themselves enough time and runway to reach product-market fit.

A founder’s capital investment consists of the cost to launch and the indirect cost of foregone salaries. This foregone salary is often overlooked and often higher than the launch costs. A 12-month period for a founder could mean foregoing a salary of more than $100K.

To truly test product-market fit, a founder may need to budget for up to 24 months before a strong signal emerges. Uber…

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