Re:Startup Mistakes: Choice of Datastore
by vidarh on Thursday November 16, 2017 @11:38AM
(#15714043)
Consider that for a startup money now is worth a lot more than money even 6-12 months from now, unless you're failing anyway.
Let's say the valuation increases 10-fold between the MVP and the next round. Any $1 in investment I can defer from the first round to the second round then costs shareholders a tenth as much dilution. So even if I end up spending far more money, I may come out ahead, as long as the choices won't hold us back until then.
This doesn't take into account that I might not even be able to raise enough for a more expensive solution, so I might not have a choice.
So a lot of the time the right choice is what costs the least amount right now even if you know it will cause costly re-engineering down the road if you're successful.
For a mature business the tradeoffs are different. If you know your growth rates will be modest, then getting it right from the start matters a lot more.
Let's say the valuation increases 10-fold between the MVP and the next round. Any $1 in investment I can defer from the first round to the second round then costs shareholders a tenth as much dilution. So even if I end up spending far more money, I may come out ahead, as long as the choices won't hold us back until then.
This doesn't take into account that I might not even be able to raise enough for a more expensive solution, so I might not have a choice.
So a lot of the time the right choice is what costs the least amount right now even if you know it will cause costly re-engineering down the road if you're successful.
For a mature business the tradeoffs are different. If you know your growth rates will be modest, then getting it right from the start matters a lot more.