In the earliest days of a startup, the founders are hugely optimistic and driven. But they also know about the low odds of reaching the point of having paying customers and even lower odds of reaching $10M in annual revenues or some interesting exit. At the same time, they don’t have enough cash to do everything “the right way”, which means they cut a lot of corners. In other words, they don’t worry about doing many things “by the book”. They decide to worry about that later when they have the luxury of cash in the bank and a less than 70-hour work week. But the reality is there never seems to be a good time to go back and fix the cut corners. The accumulated by-the-book debt will eventually come due and the later that happens the more painful it is.
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