Is There Such a Thing as Too Much Funding?

Raising too much investment funding at once might not be the most capitally efficient way to run a business. Here’s why.

It’s New Year’s resolution time, and people everywhere are determining to cut back on bad habits, having determined that you can in fact have too much of a good thing. As OpenView’s Ricky Pelletier explains in this short video, investment funding is no different.
Not only is it impractical for some expansion-stage companies (and potentially highly dilutive to the founders), raising too much funding can also be a “gateway mistake” that leads to further bad habits. Example: Excessive funding can lead to excessive spending.
By spending less, companies can develop good habits of operating lean and doing more with less — and they’ll know they can do so again in the future if the need arises. By building your business with fewer resources and making sure you maintain control you can insure that you’re building an efficient, sustainable business that will be worth even more to investors further down the line.