Got Funded? Here Are Some Common Mistakes Seed Funded Startup Do

Got Funded? Here Are Some Common Mistakes Seed Funded Startup Do

5 Common and Avoidable Startup Mistakes

First thought that comes in an entrepreneur’s mind is to get funds for his startup. The startup founders live in the biggest myth of life that, once they have funds for the business, their startup will automatically run. However, due to common mistakes seed funded startup do has led them to scum to halt. The seed-funded startup is great to kickstart a successful startup, but never assume it as a final destination, because the journey is very long after this. Launching a new startup is like a giving birth to a baby which ideally take a short span of time but the real responsibility comes after that. You need to plan the whole life of your baby and take care of all the needs. In the same way, after getting the initial investment through seed funding, planning and using it properly to boost the startup is important.


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Numerous startup founders fail to manage it after getting seed funded, as they had utilized their all energy in getting the funding. As per a recent release of a report, it revealed the fact about the failure of new startups, which we would share with the esteemed readers right away. A common reason for the failure of the startups is they fail to deliver their promises and fails to manage their team. These are the two major reasons for the downfall of many startups. But these are not the only mistakes which startup owners do, other than this few other mistakes are present in the bucket to avoid failure which is enumerated –

A Strict "Not To Do" List

Hiring vs Firing.

It’s very important to give the investors what you have promised them earlier. The selection of the team is very crucial and should be made after full clarity. As the whole performance of the business depends upon the employees that are going to work in it. So hire very carefully, so you won’t need to fire easily. Keep the following points in mind before hiring your staff:

  • Don’t hire your family members or friends in your startup. They might work at fewer rates, but they are not trained to perform the job. So never mix up business and personal relationship with each other, as this reaction might get explosive.
  • Don’t hire because a job seeker is ready to work at less rate. You need an experienced person to run the startup, as your business is already new, so don’t add a new equation to it. Hire someone with knowledge of market strategy and a person who is, as passionate as you about the idea of the startup.
  • Avoid outsourcing the employees. There are several companies present in the market, which outsource their staff and they are running very successfully. However, for new startups, it might cross the budget and pile up the employment cost.
  • Don’t hire only because a person has worked for Google, Apple or some other big tech company. You should not judge them on the basis of their previous company but you should assess them as per your startup requirement. An employee should be suitable to work in a startup culture.

Keep your book’s Straight

To utilize the money properly and keeping it from wastage, make the required documents and accounting records perfectly. The two major books that every business should be made are:

  • The bookkeeping is the major part of a successful business. You need to record all the expenses and incomes accounts to tally the growth of the business. You need to record all the petty and big cash expenses daily. From spending a dollar on coffee to the purchase of any new equipment all should be written in the accounts properly. To get the fair picture of your business, it’s highly important to make your journal daily. It’s good to get it checked by a Chartered Accountant from time to time.
  • The legal documents are required to make daily contracts or bindings. Startup owners normally spend thousands on hiring lawyers to do legal work, which they can easily do themselves. All the legal wording is available online and you know the procedure also, so why waste money on hiring an expensive lawyer, when you can do that on your own.

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Get market Feedback & Communicate regularly

To understand the nature of your customers and to understand the demand for your product regularly, it is very important to get feedback. Although hiding from the facts or not sharing your ideas with anyone, because of the fear that they might steal it is underestimating yourself. Your idea could be unique but one day or the other your competitor would come with the same plan. There is no worry if you share your idea because it will always get better with the feedback.

Put curb on unwanted expenses

You do many unwanted expenses in the daily course, which can be easily avoided or can minimized. So identify those expenses and reduce them to the bare minimum level. Few of the avoidable expenses are:

  • Don’t spend money on the locality of your office or the decor to attract customers, as they are here for the product and not to see your fancy chandelier.
  • Gifting the investors is again a bad idea because if they can fund your startup then they can even buy gifts for themselves.
  • Don’t waste time and money on conducting useless meetings, because no meeting has deliver any benefit to the startup owners and start having hurdle session with your team to motivate and get to the root of the problem.
  • Don’t hire unwanted employees like receptionist, as you are very capable to handle your own business calls and make your own coffee.
  • Go electronic and take the help of technology. For example, if you want to hire an assistant to handle your emails simply download a free Email sorting app and save an employee’s salary.

Miscellaneous Factors

  • 90% of the startup owners don’t emphasize on the reason behind their failure. They keep chasing their aim while neglecting the reasons for failure.
  • The startup founders built their own LA LA land. All those compliments from people can be intoxicating. Feel good about them, but don’t let them get into your head. You have not made it big yet.
  • Not thinking of realistic unit economics.
  • Giving too many employee benefits like HRA, Education allowance etc. shrink your working capital funded by investors. Until and unless you own 100% stake in your startup, avoid giving unnecessary allowance.
  • If you are not planning a yearly budget for hiring & other things then you might end up landing in trouble.
  • Growing a lot of vanity metrics / Developing features that get users/engagement but may not help the business in a long run in any way to make revenues.

Well yes, the startup owners make so many mistakes after getting seed funded. They really get crazy and spend the investor’s money rudely, but they forget the deal they need to return it at some point of time. Well, we hope that the above article has provided you with immense information to seriously manage the sum of investment and grow out of it.


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