strategy

When the Venture Path Ends, What Happens Next?

When SaaS funding became scarce, founders were told to get profitable. For some, that meant cutting acquisition spend, shelving expansion plans, and focusing on the customers they already had. Growth took a back seat to keeping the business alive.
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But slow growth makes another venture round unlikely. So what happens next?
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In a lot of cases, everyone keeps going under the terms and expectations of the original investment. The founder is still trying to hit growth targets that may no longer make sense, while the investors own a business that’s unlikely to produce the return they signed up for.
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If the company can sustain itself but no longer has a venture-scale future, there should be a conversation about ownership and expectations. Do the investors want to remain involved on those terms? Would they take liquidity at a realistic price? Could the founder, or a new ownership group, buy them out over time?
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These aren’t easy conversations, but avoiding them leaves the founder chasing an outcome nobody is really backing, and the investors going through the motions to remain supportive. It’s not a great use of anyone’s time.
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One of the reasons I created Starters was to help companies make the transition after the venture path has ended.

Image credit: SaaS Capital

Product observations

Prompt Factory is the New Feature Factory

Remember the term "feature factory" for SaaS companies that kept adding features in hopes of making their product more valuable? Today's equivalent is a prompt factory.
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Prompt factories add more and more AI to the workflow, churning out more product, more analysis, and more reporting, hoping that somewhere in the jumble is a solution their market wants.
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The problem with both feature and prompt factories is that more stuff often moves you further away from value. Your market wants a solution to its problem, with as little crap to climb over as possible to get there.
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It's obvious, and a bit cliché, but it's still not easy. I've been wrong about what a market wants more often than I've been right.
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But one thing I've learned is that very rarely does a market want more stuff.

operator update

We're Excited to Welcome Dan London to Starters

If you've been around the NC startup ecosystem, Dan's name may ring a bell. Dan has led marketing and growth at breakout companies Adwerx, Bandwidth, ShareFile, and Ansible, and now helps B2B founders grow revenue and reach profitability.

Hi, I'm Paolo. I'm an operator.

After meeting dozens of good startups that I thought could become great startups, I formed Starters. Sometimes, all it takes to get to the next level is an assist from someone who has been there (and made it through).