Early-Stage and Growth Investors Differ: Validate a Profitable Model Before Scaling

Wisdom from the great JJ. Personally, I see this as a difference in stages. An early startup still building a minimum viable product (MVP) and establishing product-market fit (PMF) will naturally keep losing money. It needs early-stage investors willing to bear that risk. #For early-stage investment, look to AVA Once the MVP is complete and PMF validated, there are investors for that stage too. PMF is generally followed by raising more capital to scale or enter other countries. Those investors commit more money and need more numbers. One way to validate PMF is to show the results achieved. The key remains whether the team has genuinely discovered a business model capable of profitability. Refine the product and service before rapidly replicating it at scale. Expanding the team and copying the business widely without finding that model often only leads to a faster death. Some Taiwanese teams rush to expand before proving a profitable model and end up burning the candle at both ends. If the team initially chooses Taiwan—not a requirement, but a familiar home market—yet has not validated its model and product or service there, pressure to supply a growth story for the next round, or investors pushing it overseas, can create two problems. First, attending to one market means neglecting another, as past cases in Taiwan’s restaurant-reservation market have shown. Second, it burns money in Taiwan and overseas without clear results, sharply accelerating the rate of cash burn.