When investors push for growth but margins implode

And you burn cash faster than you grow

Do you recognize this situation?

• You've taken investment to grow quickly
• Investors want "scale now"
• You hire, invest in marketing, expand
• Revenue grows but margins are negative or non-existent
• You burn cash and the next round seems far away

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The trap of unsustainable growth

Investors bought a promise: exponential growth.

And you're trying to deliver it.
You hire to expand.
Aggressive marketing to acquire customers.
Geographic expansion, new product lines.

The growth numbers look good.
But the economic numbers are disastrous:

• Negative unit economics
• CAC (acquisition cost) > LTV (customer value)
• Burn rate devouring runway
• Break-even increasingly distant

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What happens when you grow too fast

On the economic front:

• Cash burned faster than expected
• Need for new round earlier than planned
• Excessive dilution if forcing round at low valuation
• Risk of not closing round and failing

On the operational front:

• Team grown too fast, diluted culture
• Absent processes because "there's no time"
• Quality drops, customers notice
• Churn rate grows with acquisition

On the strategic front:

• You lose control of the company (investors decide)
• Pressure for premature exit at unfavorable terms
• Impossible to say "let's slow down to consolidate"
• Spiral: grow badly → worried investors → more pressure → grow worse

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Why it happens

Investors want growth because their model is based on scale.

10x in 5 years, then exit.
They don't care about immediate profitability.
They care about market dominance.

And this is fine if unit economics work.
If each acquired customer generates value over time.

But if you're acquiring customers at a loss, hoping to "fix it later", you're building a house of cards.
The bigger it grows, the more fragile it becomes.

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The (wrong) path many try

Apparent solution: Seek new round to keep growing

But if unit economics are wrong, more money = more problems.
You burn more, you don't fix the structure.

And each successive round is harder if fundamentals are negative.

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The 5-step method:

1. Brutal truth about numbers
   → Real CAC, real LTV, payback period
   → Without illusions or optimistic projections
   → If it doesn't work, admit it
2. Negotiation with investors
   → "Slow down now to grow healthy later"
   → Show data: unsustainable growth vs. healthy growth
   → Some will understand, others won't (better to know now)
3. Focus on unit economics before scale
   → Fix the model with current customers
   → Pricing, retention, upsell
   → Only after, scale
4. Selective growth, not indiscriminate
   → Only customers who meet target unit economics
   → No "growth at all costs"
   → Quality > Quantity until model is solid
5. Profitability scenario
   → Plan B: if you don't close next round, are you sustainable?
   → Cut the non-essential NOW
   → Don't wait for emergency

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What changes after

You still grow, but sustainably.

The right investors will appreciate.
The wrong ones will leave (and that's okay).
You build a real company, not a house of cards.

And when the next round comes, you'll negotiate from a position of strength.