This startup raised a ton of money so it must be doing well

One of the biggest misconceptions that folks new to the startup world have is that companies that have raised a ton of money are crushing it.

There are plenty of examples of “lots of money raised” flops abound in the venture/startup world. For instance:

  • Color ($41MM raised – sold to Apple for probably pennies on the dollar)
  • Fab (OK, not a total flop but going through a big time retrenching)
  • 75% of the companies funded during the last bubble

And on the flip side there are companies that are killing it that have not raised that much money. Another good reason not to focus on the amount of money raised.

Funding stage is not that helpful in determining if a startup has made it, either. When smart VC’s are calling what’s often the 3rd round of funding at a startup ‘the sucker round‘ you as a startup job seeker should probably take note!

I’ll talk more about these topics in my upcoming startup jobs book, too. You can get the free preview here.