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Comment by jseliger | Hacker News Reader

Founders overspend once they get their first initial investment

Interestingly enough, Joel Spolsky wrote about this danger in http://www.joelonsoftware.com/articles/VC.html , where he discusses the relationship between revenue, PR, fundraising, and code. Any of those can get wonky if one substantially outpaces the others.

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I am not sure that spending it all on yourself is the worst thing you can do with the money. If you continue to live on raman then you will be accumulating a lot of cash that you can leverage later. I am surprised that any investor would sit back and let this happen - I certainly wouldn't if I was an investor in such a company.

I'm also very surprised this happened. I've done my fair share of Ramen, can barely eat it anymore. I'd assume they sold the investor on selling the service to Universities at 50K each, the investor believed in them and that he'd get a good return in his investment.

Well in cases like this the investor should have known better. I really think your friends did OK.

I sell into the university system and I expect that each sale will take me at least 12 month to convert. The positive is that once you sell a university customer you rarely lose them.

Yeah, I'm a little disappointed in my friends. I still think they have a product. But the whole team broke up. Awesome your making sales, and your right, universities will most likely continue using the same service once it's been adopted.

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