Why Founders Should Avoid Equity Deals Before Validation

Giving up equity early on is one of the worst decisions an entrepreneur makes. Say, you give up 15% for $200k in pre-seed accelerator funding. What happens next?

You haven’t validated anything yet.

You don’t know whether your business has the capacity to go from 0 to $100M in 5-7 years.

That’s what VCs are looking for: Blitzscaling.

Most businesses cannot blitzscale.

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Featured Videos

Startup Afghanistan: Pros and Cons of Local Accelerators

The Accelerator Conundrum is a multipart series that challenges the prevailing wisdom of the tech startup ecosystem that entrepreneurs should Blitzscale out of the gate. Written by Sramana Mitra, the Founder and CEO of One Million by One Million (1Mby1M), the world’s first global virtual accelerator, it emphatically argues that a better strategy is to Bootstrap First, Raise Money Later, focus on customers, revenues and profits. 1Mby1M’s mission is to help a Million entrepreneurs reach a million dollars in annual revenue and beyond. Sramana’s Digital Mind AI Mentor virtually mentors entrepreneurs around the world in 57 languages. Try it out!

While Afghanistan has seen various entrepreneurship programs, none have been able to establish long-term, stable support for startups. Below is a comparative view:

Best of Bootstrapping: Bootstrapped Tuft & Needle to Over $100M

Online mattress is one of the hottest e-commerce categories, and here is yet another one delivering venture-scale growth without venture capital. Tuft & Needle Co-founder JT Marino shared his story with me in 2017.

If you’re inspired by Tuft & Needle’s bootstrapped success, explore how a virtual accelerator for solo founders or an equity-free startup accelerator can help you grow on your own terms.

Sramana Mitra: Let’s start at the very beginning of your journey. Where are you from? Where were you born, raised, and in what kind of background?

JT Marino: I was born in Phoenix, but I grew up in Pennsylvania. I went to Penn State. That’s where I met my co-founder, Daehee Park. From there, my career took me to Silicon Valley working for several startups. That’s where my co-founder and I stuck together. We were at a company at Palo Alto and we decided that we wanted to build something of our own. Based on our previous experience with startups, we wanted to do it a different way.

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Video FAQs

Building a Venture Scale Enterprise AI Company from Spain: David Villalon, CEO of Maisa (Part 7)

Sramana Mitra: Tell me about the sentiment in European enterprises right now regarding AI adoption. You’re succeeding in driving adoption inside European enterprises, which is great. What’s going on?

Autonomy Is the Ultimate Entrepreneurial Luxury

Autonomy is an underrated luxury. Somehow, investors have convinced entrepreneurs that working 80 hour weeks to make money for them is PRESTIGIOUS. More so than personal wealth creation. More so than family, relationships, health and wellbeing.

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Building a Venture Scale Enterprise AI Company from Spain: David Villalon, CEO of Maisa (Part 6)

Sramana Mitra: What I like about your pricing model is that it aligns with the ongoing debate between subscription, value-based, and usage-based pricing. Subscription pricing remains the most attractive model in our industry. If you can make it work without breaking your unit economics, it’s the most desirable for everyone — enterprises, buyers, startups, and even analysts.

Startup Afghanistan: Why Bootstrap First Is Critical to Build an Accelerator Ecosystem

The Accelerator Conundrum is a multipart series that challenges the prevailing wisdom of the tech startup ecosystem that entrepreneurs should Blitzscale out of the gate. Written by Sramana Mitra, the Founder and CEO of One Million by One Million (1Mby1M), the world’s first global virtual accelerator, it emphatically argues that a better strategy is to Bootstrap First, Raise Money Later, focus on customers, revenues and profits. 1Mby1M’s mission is to help a Million entrepreneurs reach a million dollars in annual revenue and beyond. Sramana’s Digital Mind AI Mentor virtually mentors entrepreneurs around the world in 57 languages. Try it out!

Afghanistan is a nation in flux. Decades of conflict, political instability, and recent regime changes have left its economy fragile. Yet, despite these challenges, there is a growing generation of resilient, talented young Afghans determined to create opportunities through entrepreneurship.

Colors: Hidden Impressions IV

I’m publishing this series on LinkedIn called Colors to explore a topic that I care deeply about: the Renaissance Mind. I am just as passionate about entrepreneurship, technology, and business, as I am about art and culture. In this series, I will typically publish a piece of art – one of my paintings – and I request you to spend a minute or two deeply meditating on it. I urge you to watch your feelings, thoughts, reactions to the piece, and write what comes to you, what thoughts it triggers, in the dialog area. Let us see what stimulation this interaction yields. For today – Hidden Impressions IV

Hidden Impressions IV | Sramana Mitra, 2023 | Watercolor, Ink, Pastel | 9  x 12, On Paper