Investors · Seed funding

How quickly do venture capitalists expect you to spend their investment?

Ashu Kumar ISTQB AND NCFM Certified

April 4th, 2017

I have some friends who raised modest seed rounds and both said that their funding came with strict and short timelines to spend the cash. This surprised me a bit as I had assumed their investors might have them spend the money incrementally and measure the impact of each outlay. Is it common for investors to ask you to spend fast for fast growth?

Dane Madsen Organizational and Operational Strategy Consultant

April 4th, 2017

It depends on the space and what the company is trying to accomplish. Spending slowly may keep the company from developing - and ironically costs much more to achieve the same results. VCs want you to spend the money as you all agree. This is individually developed for each company. This does not mean that the strategy is right, however. I have seen companies forced to spend money in a way that was devastating.

Selvan Rajan

April 4th, 2017

Sometimes taking the leadership role needs some real force. In startups, the force is the money. It allows you to gobble a big market share.