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Comment by wpietri | Hacker News Reader

Depends on your perspective. One of the articles of faith in this industry is that good startups get investment and succeed, while bad ones fail. To whatever extent that's true, it won't be particularly worse here. Startups who made treasury management errors and are experiencing cash crunches can make very good cases for bridge loans and extra investment from their existing investors. If their investors are like, "nah, pass" then that's a pretty good reason to question their potential generally.

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> One of the articles of faith in this industry is that good startups get investment and succeed, while bad ones fail.

Is it? I thought it was that startups with exciting books and good networks get a chance to ratchet into the next round of funding.

Great startups drown all the time for not being a VC rocketship, when they they could have grow into a perfectly successful cruiseliner under traditional fundraising or bootstrapping.

If investors are “nah pass”, it’s more about making a quick decision about near-term finance opportunities than the mid-term or long-term strength of the underlying business. VC investors inherently care more about 10x exits than sound business practices.

I'm not saying it's true. I'm saying it's an article of faith.

I'm normally very against the HN norm of just naming a fallacy and considering an entire argument dismissed but in this case I think it does apply. This is not a Just World, some unworkable companies will get bridge funding because of their connections and no other reason.

Aside from that timing is always a thing. There's certainly a company out there that is 8 months away from proving the soundness of their idea that now only has six months of funding, or whatever.

The idea that in every case, "the market" or whatever will arrive at the most perfectly correct conclusion is silly at any time, but particularly in one of uncertainty and upheaval.

Yeah, I'm not arguing that "whatever will arrive at the most perfectly correct conclusion". (And I don't think that sql-spy was arguing that either.) What I'm saying is that I don't think this particular circumstance is going to be any less just than usual.

Indeed, I think there's good reason to expect it to be more just given that what we're talking about is mostly a short-term cash crunch that's easily explained. E.g., one company is raising $1 bn for bridge loans: https://techcrunch.com/2023/03/11/brex-ceo-is-trying-to-rais...

That kind of support is not something marginal startups have access to in normal times.

Circumstances changed.

Running a startup means time is never on your side. If you are still 8 months away from proving "soundness" of your idea then you are already too late.

ok but I mean that means that whatever outcome arrived at is necessarily the correct outcome. you're establishing correctness post hoc and so you will always find it. have fun tho.

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