I’ve never been a founder or a VC, so I don’t really know, but happy to speculate :)
I’d imagine it depends on the company, and “how are you going to spend the money” is something you’d discuss with VCs before the investment goes through.
I think the strong majority of the time, VCs want you to pump the money into the business to drive immediate hyper growth. They want to identify businesses that can soak up VC money and make good use of it … like Google, FB, etc. Most companies can’t, the money drives just moderate growth and a lot of inefficiency, but they want to do this test to see if they’ve struck gold. If you agree to do this, then don’t, new CEO time.
But I think there’s some companies that are clearly big, long term product bets. Where they know the runway has to be long, and years of product development has to happen before major growth. For example, I’m guessing if you’re a series A investor in something like CockroachDB, Tesla, SpaceX, you’re a bit more “yeah, take your time, spend this over 5+ years.” But that’s an anomaly, not the norm.
I’d imagine it depends on the company, and “how are you going to spend the money” is something you’d discuss with VCs before the investment goes through.
I think the strong majority of the time, VCs want you to pump the money into the business to drive immediate hyper growth. They want to identify businesses that can soak up VC money and make good use of it … like Google, FB, etc. Most companies can’t, the money drives just moderate growth and a lot of inefficiency, but they want to do this test to see if they’ve struck gold. If you agree to do this, then don’t, new CEO time.
But I think there’s some companies that are clearly big, long term product bets. Where they know the runway has to be long, and years of product development has to happen before major growth. For example, I’m guessing if you’re a series A investor in something like CockroachDB, Tesla, SpaceX, you’re a bit more “yeah, take your time, spend this over 5+ years.” But that’s an anomaly, not the norm.