Alright folks, time for some real talk. I fucked up. Big time. And I'm here to share my story so you don't make the same mistakes I did.
Back in 2021, I co-founded a web3 startup. Yeah, you know where this is going. I was caught up in the hype, the FOMO, the promise of changing the world through DAOs. Spoiler alert: We raised more than $5M in seed funding, burned through half of it, never hit product-market fit, and ended up shutting down and returning the remaining capital to our investors.
Here's how it went down:
It all started when I fell down the web3 rabbit hole. I read a few whitepapers, watched some YouTube videos, and suddenly thought I was the next Vitalik Buterin. I had this "revolutionary" idea for a DAO that would democratize venture capital. Sounds cool, right? I thought so too.
Now, here's the thing - I'm a great pitcher. Give me a deck and 30 minutes, and I can make almost anything sound like the next unicorn. So, armed with buzzwords and a slick presentation, I hit the VC circuit.
And holy shit, did it work. We were a great team, stellar credentials so were able to close the fundraise pretty quick. I still remember the day we closed the round. Popping champagne, dreaming of TechCrunch headlines once we did our Series A, all the jazz.
But here's what I didn't realize at the time: I had zero conviction in what we were building. I was so caught up in the excitement of raising money and being part of the "next big thing" that I never stopped to ask myself if I truly believed in what we were doing.
Reality hit hard and fast. As we started building, I realized I didn't really understand the problem we were solving. Our target users weren't as excited about the product as we were. We pivoted, then pivoted again. But nothing stuck.
Eighteen months in, we had burned through $3M, had no clear path to revenue, and my co-founder and I were at each other's throats. That's when it hit me - we needed to shut this down before we wasted any more of our investors' money.
Making that call was the hardest thing I've ever done. Telling our team, our investors, our families - it sucked. But it was the right thing to do.
Here's what I learned from this expensive and humbling experience:
1.ā ā Hype is not a business model: Just because something is trending doesn't mean it's a good business opportunity. Do your own research, understand the market deeply. 2.ā ā Raising money ā Success: It's easy to get caught up in the vanity of a big round. But money just buys you runway, not success. 3.ā ā If you can't explain it to your grandma, you don't understand it well enough: I couldn't clearly explain our value proposition without resorting to buzzwords. Red flag. 4.ā ā Team alignment is everything: Make sure you and your co-founders are on the same page about the vision, not just the potential payout. 5.ā ā Listen to the market, not your ego: We ignored early signs that users weren't as excited about our product as we were.
But the biggest lesson?
You need 100% conviction to run a startup. Not 90%, not 99%. 100%.
Building a company is hard. Really fucking hard. There will be days when everything seems to be falling apart. If you don't have absolute conviction in what you're building, you won't have the resilience to push through those times.
Looking back, I realize I was more in love with the idea of being a founder than with the problem we were solving. I was chasing clout, not impact.
To anyone out there thinking of starting a company: Please, please, please make sure you have unwavering conviction in your idea. Make sure you're solving a real problem that you deeply understand and care about. Don't do it for the hype, the money, or the status. Do it because you can't imagine doing anything else.
As for me? I'm taking some time off to reflect. Next time (if there is a next time), I'll make damn sure I believe in what I'm building with every fiber of my being.
I sort of see this happening now with AI, please take a pause. Let's learn from each other. Because trust me, learning this lesson the hard way? It ain't fun.
Keep building!
I will never understand this phenomenon of people getting funding based on pitch decks , while startups like mine with actual revenue and paying users will never get funding because we don't have IIT IIM tags or flashy stuff that catches investors.
Pisses me off to no end tbh. People like you and VCs like this make the whole ecosystem look stupid af.
I know it's not completely your fault either, it's just how things are. But I can't help it tbh. I've seen too many deserving startups die due to lack of capital, including mine. It's hard to read such stories and empathise because it's pure privilege in the hands of a few, wasted away for no good reason.
Look, a CEO's fundamental job is to ensure the ship runs. I know I'll sound cocky, but don't blame VCs or founders who were able to raise capital for your inability to do so.
I'm not mining for any empathy here. It's straightforward:
That's it. It's that straightforward.
Sorry if this comes off as cocky, but I'm not here to take shit just because someone else wasn't able to raise money. Maybe it's time you brush up on your sales muscle :)
All that sales muscle and couldn't sell your own product, pretty ironic.
Being able to sell to VCs but not actual customers is the most useless skill one could ever have, no offense :)
As for me, I'm done with VCs. I'd rather stay bootstrapped than listen to an idiot who funded a pitch deck. Most Indian VCs are just dumb af, have seen it all. I'm happy running my businesses without investors now, I learnt my lessons too.
How much did you get to keep out of the fundraise when you returned capital?
Took a salary for 16 out of the 18 months - thatās pretty much it, the capital raised was for the company not us founders
Me and my founders were very specific about governance from day zero - having the right values is important.
It's not about governance. It's about negotiation. You return the VC some money and they reward you for it (because you can choose not to return it and burn through all of it).
But good to see that you are one of the few rare founders who were honest about the process
ā How much money did you personally end up making by the end of it.
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