Avoiding the Startup Graveyard- How Not to Die
Most startups don’t fail because of bad ideas; they fail because of avoidable mistakes.
As someone who has scaled a billion-dollar unicorn, built and exited my own startup, and invested in many more, I’ve seen the same rookie errors over and over. These foundational mistakes aren’t just costly—they’re fatal.
Here’s what every founder needs to know to survive the early stages of startup life and avoid becoming just another cautionary tale in the startup graveyard.
Survival isn’t guaranteed, but it is within your control.
1. Build a Business, Not Just a Product
Many founders are so focused on solving a problem that they forget the most basic truth of startups: every business needs cash to survive. Profitability isn’t optional, and no amount of funding will save a bad business model. The cash you make is always safer than the cash you’re given.
Lesson: Validate your idea before you build. Test it with paying customers, refine your business model, and ensure there’s a clear path to sustainable revenue.
If no one will pay for your solution, your startup is already dead.
2. Fundraising Isn’t the First Step
It’s easy to think the journey starts with pitching to VCs. But unless you have significant traction or revenue, you’re wasting your time. VCs aren’t betting on ideas—they’re betting on billion-dollar outcomes. If you’re not there yet, focus on building.
Lesson: Bootstrap. Lean on early believers—friends, family, fools—before approaching institutional investors. Show traction first, then fundraise.
3. Embrace Discomfort
Founders avoid asking the hardest questions because they don’t want to hear the answers. But what you don’t want to know will kill you the fastest.
Lesson: Seek feedback from critics, not just cheerleaders. What problem are you solving? Why would someone choose you over the competition? Be brutally honest, then adjust.
4. It’s Never Too Early for PR
PR isn’t just for later-stage companies—it’s how you sell your vision from day one. As a founder, you’re always selling: to customers, investors, partners, and even future employees. Your message needs to be loud and clear because the people who invest in you six months from now are the ones hearing your story today.
Lesson: Shout your message from the rooftops. Network relentlessly, pitch your story, and keep your leads warm with regular updates. Consistent visibility builds trust and ensures you’re top of mind when it’s time to raise capital.
5. Don’t Get Creative With Your Pitch Deck
Your pitch deck isn’t the place to reinvent the wheel. VCs engage in pattern matching—they’ve seen thousands of decks and are trained to process information quickly. A flashy, overly creative deck often works against you by making it harder for investors to see what they’re looking for.
Lesson: Use simple, proven templates for your pitch deck. Focus on the essentials: What’s the problem? What’s your solution? Why are you the team to solve it? Clarity and structure win over creativity every time.
6. Always Plan for the Bridge
Hitting $1–2M ARR is an insanely difficult milestone to achieve, especially within the VC-prescribed timeline of 18 months. VCs often expect your startup to mature on their timeline, not yours—and they’re willing to let your startup die if it doesn’t fit their expectations. But the goal isn’t just securing the next round of funding; it’s building a startup with lasting impact.
Lesson: Think beyond the first round. Plan for sustainability and growth on your terms, not just to satisfy a funding timeline. Investors want to know how you’ll use their money to achieve meaningful milestones, but lasting success requires building a business that can thrive without rushing to meet artificial deadlines.
7. Play the Numbers Game
Founders underestimate how hard fundraising is. The reality? Most investors will say no. But here’s the key: the relationships you build now are the ones who fund you six months from now. Every conversation, every pitch, every follow-up is laying the groundwork for future investment.
Lesson: Expect a 3–5% hit rate. That means 96 out of 100 pitches will end in rejection. Build your pipeline, nurture relationships consistently, and keep going. Persistence and relationship-building are as critical as the pitch itself.
8. Nobody Is Waiting to Hand You a Check
It’s easy to believe that venture capital is the answer to your startup’s challenges, but here’s the reality: only 1% of startups globally secure VC funding. If you’re depending on VC money to save your company, you’re playing a dangerous game. The harsh truth? Nobody is waiting with a check to solve your problems.
Lesson: Build a business that can sustain itself. Focus on generating revenue, reducing burn, and creating value that doesn’t rely on external funding. VC funding can accelerate growth, but it won’t save a struggling company.
The Takeaway
Building a startup isn’t about avoiding every mistake—it’s about recognizing the critical ones before they sink you. Profitability, traction, and clarity aren’t just buzzwords—they’re your lifelines.
Your vision deserves a chance. Give it the foundation it needs to thrive.
Build a business with a clear path to revenue. Validate relentlessly. Plan for every stage of growth. And remember: your startup’s success begins and ends with you.
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Lane Litz is a proven startup founder, operator, and venture capitalist with a track record of building, scaling, and investing in high-potential startups. As employee #6 at VIPKID, she helped grow the company to a $3B valuation. Later, as the CEO and Co-founder of Speakia, she navigated challenging market conditions to lead the startup to acquisition. Her time in venture capital gave her a front-row seat to the systemic flaws in traditional VC, inspiring her to found Founder VC. Now, Lane is reshaping the venture landscape with a founder-first approach, focusing on sustainable investments that deliver measurable value for both founders and investors.