Got Funding? The #1 Mistake That Sinks Startups

In this episode of Tales from the Pros, I sit down with my co-host and our Director of Growth, Eric Lawrence, to talk about something that hits home for many founders: what happens after you get funding.

You’d think raising capital is the hard part, but what often follows can be even tougher. So many startups make one critical mistake right after receiving funds: choosing the wrong development partner. 

We’ve seen this happen countless times. Founders get the runway, rush into development, skip validation, and end up burning through their budget with little to show for it.

In this conversation, we dig into the emotional and financial cost of poor partnerships, why idea validation before development is essential, and how having funding can create a false sense of security. 

I share real experiences from our journey at Imaginovation, where a lack of planning and unrealistic expectations led to unnecessary setbacks.

We also talk about how to approach these situations differently: plan early, document thoroughly, build trust with your team, and stay intentional at every stage. Because in the startup world, success doesn’t come from getting funded. It comes from what you do next.

🎯 Highlights You Won’t Want to Miss

• The emotional and financial impact of poor development choices – 08:58
• Why validation before development can make or break your startup – 06:32
• How proper planning and documentation prevent costly rework – 23:04
• Building a lean MVP that encourages user-driven iteration – 20:13

🎧 Listen and Subscribe

Spotify: https://open.spotify.com/show/6QkUtrcNllUkqtq1fjlwnZ

Apple Podcasts: https://podcasts.apple.com/us/podcast/tales-from-the-pros/id1371067192

YouTube: https://www.youtube.com/@Imaginovation/podcasts

SoundCloud: https://soundcloud.com/talesfromthepros

🗂 Topics We Cover

• Navigating post-funding decisions with confidence
• The pitfalls of choosing the wrong development partner
• Why validation should come before development
• Setting realistic expectations with vendors
• The emotional toll of poor partnerships
• How documentation and planning set the foundation for success
• Building a lean MVP and learning from user feedback

Takeaways

• Startups often choose the wrong development partner after funding.
• Having funding can create a false sense of security.
• The emotional toll of poor partnerships can be significant.
• Validation of ideas is crucial before development begins.
• Setting realistic expectations with development partners is key.
• The cost of rework can be devastating for startups.
• Building a lean MVP allows for user feedback and iteration.
• Documentation and planning are essential before starting development.
• Trust between startups and vendors is critical for success.
• Being strategic and intentional can save a startup's future.

Chapters

00:00 The Startup Funding Dilemma
03:41 The Importance of Choosing the Right Development Partner
06:32 Balancing Validation and Development
08:58 The Emotional Toll of Wrong Partnerships
11:49 Realistic Expectations in Development
14:35 The Cost of Rework and Time Loss
17:24 Learning from Past Mistakes
20:13 Building a Lean MVP
23:04 Planning and Documentation Before Development
26:01 Final Thoughts and Advice