The Impact of Venture Capital on Startups

Venture capital plays a crucial role in shaping startups, particularly in the tech industry, by emphasizing rapid growth and scaling. This financing model drives companies to prioritize acquiring users over sustainable business practices, creating pressure to maintain a steady increase in valuation. The underlying expectation of venture capitalists is that startups will achieve impressive growth metrics, often regardless of the product's long-term viability or user satisfaction. Consequently, this obsession with rapid expansion often leads to organizational problems, including a workforce that is stretched thin and an operational framework that prioritizes fundraising over meaningful innovation.