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Tim Chang calls the series A crunch the Tweener Pit.

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Most Startups hit a wall because they're not growing fast enough:

A few days ago I was reading Business Insider’s coverage of the demise of Everpix, a photo storage and sharing startup that says it failed because it couldn’t raise a Series A round in spite of having a small but very dedicated base of enthusiastic users—many of whom paid.

This is something we’re hearing a lot: Startups that got their seed round, no problem, but then the interest in a Series A dries up. Customers are left disappointed. Entrepreneurs are left with their dreams crushed. There’s yet more fuel for headlines like “The Series A Crunch is hitting now. Have we even noticed?” and “Are we in a Series A crunch? You bet your ass we are.

But the problem isn’t that there isn’t money out there. The reality is that most startups, both consumer- and B2B-focused, aren’t growing their customer bases in a way that justifies another few million in the bank. The fact that there’s such a lack of knowledge about this is a problem. We should stop scaring startups with the bogeyman of a general Series A crunch, and instead make widespread the tactics that they need to avoid what I call a “Series A meltdown.” And that “meltdown” is what happens when a startup realizes too late that it’s focused on the wrong strategies for customer or user acquisition—if it’s been focusing on them at all.

“Most seed-funded companies are doomed to fall into the ‘Tweener Pit’ between seed and larger-scale follow-on venture funding,” says Tim Chang, managing director of the Mayfield Fund. “A few product pivots and an accumulated user base of 5 or 6-figures is often not enough to validate true product-market fit, especially if many of those users were attained through ephemeral burst boosts like celeb endorsement, app store feature slot, or TechCrunch and PR spotlight.”

What he's saying is that 6 figures don't impress him much.

So basically... Forget investors. Focus on growing customers as fast as possible.

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