Break Even

As a startup, it's very difficult to get funded. But it is also only the start of the adventure. Getting funded doesn't mean less work and more security, on the contrary. It means you need to answer to investors, you need to maximize their investment. It's also the start of constant differences between the investors and the company. The problem is that both don't have the same goal to start with. Even if the goal is clearly stated in the business plan, it isn't viewed the same way by both parties.

An investor will invest in multiple companies. It knows they won't all make it, but the ones that do will payoff lots more than what they loose with the others. So an investor must push to get the maximum amount of value for the companies that do make it. They are willing to take lots of risks to make it. They don't really care about short term profitability, they want maximum traction, maximum brand name, maximum marketing, maximum burn. They have plans to invest more money in companies that have success to maximize their investment.

But as an entrepreneur, the goal is not the same. If you are part of the companies that fail, you also fail. It's going to be hard to convince another investor to invest in your company. You don't have multiple tries like the investors. You are not willing to risk as much as the investor, your priority is not maximizing burn but making the company profitable by making the right decisions at the right time. Patience is a virtue, but investors unfortunately have little of. A startup is a lot of hard and lightning fast work while holding back investors from spending all the marketing budget in the first month of launch. By becoming profitable, the company doesn't depend on raising another round and convincing new investors and old ones that the company will be a big success. The biggest advantage of becoming profitable is that the company decides when and if it needs another round and at what cost. It doesn't become a question of survival.

At Tribair, we have become profitable within a year of raising our first round, it was our goal from the start and it was shared with our investors. We have even surpassed our previsions which must be very rare in the startup world, and we get along with our investors just fine thank you.