018. Runway

Text your thoughts directly to Rich.

When you set out to raise a round of capital, you'll get asked about your runway. This is important because fundraising is a waste of your time.  😁

About SpringTime Ventures
SpringTime Ventures seeds high-growth startups in healthcare, fintech, logistics, and marketplace businesses. We look for founders with domain expertise, forging a path with a truly transformative technology. We only invest in software-based businesses in the USA. We bring a people-focused approach, work quickly, and reach conviction independently. Our initial check size is $400k to $600k. You can learn more about us and our approach.   

About Rich Maloy
Rich's mission is to rebuild the American dream through entrepreneurship. He works with early stage startups transforming the world, giving all people the opportunity to grow, learn and earn. With prior careers in finance and sales, he's now focused on startups investing through SpringTime Ventures where he is a Managing Partner. He's a father of two young children and loves sci-fi, skiing, and video games.  

Episode Transcript

Rich (00:01):
There's another component to talk about on the VC
treadmill.
And that's runway.
Runway is the amount of timethat you give yourself to get
from Here to There.
When you set out to raise around of capital, you'll get
asked about your runway.
This is important becausefundraising is a waste of your
time.

(00:22):
Okay, I'm being dramatic, butfundraising isn't the point of
the business.
The point of the business is tocreate something of economic
value.
Fundraising is part of buildinga highly scalable, fast growing
company, and while it bringsmoney in the door, it only
indirectly serves a businesspurpose.
You and I both know that yourtime is better spent building
product, acquiring customers,hiring a great team.

(00:45):
And fundraising takes time.
For most seed stage startups.
This can take around threemonths or more.
I've seen it take up to ninemonths.
And while the time to fundraiseis shortening, and that's great,
it is still a significant impacton the business.
If it's going to take you threemonths to raise a round and your
runway is only 12 months.
You realistically only have ninemonths to hit your numbers.

(01:07):
In order to level up on thetreadmill, can you realistically
achieve significant progress innine months?
Probably not.
Let me put it another way.
If you had to hit a growthobjective, would you want to
have nine months to hit thatmark or 12?
What about blowing it out of thewater in 15 months?
Runway is the amount of timethat you give your company to

(01:28):
hit your metrics to level up onthe treadmill.
As an investor, I need to besure that you have enough runway
to hit those goals to level up,and still have enough time to
raise that next round.