🪴 Are second time founders worth it?
here's why there's a disagreement among VCs whether they prefer fresh or experienced founders..
Getting funding is tough and VCs look at the quality of founders as much as their ideas. Are they more likely to back first time founders with fresh energy and new ideas or experienced founders with a track record?
It’s a double edged sword, because while seasoned founders get many advantages, they might be blindsided in other areas. Here’s the breakdown.
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📈 Potential advantages of a second time founder
1. Can hire a better team
Second time founders have built a company before. They might have sold it or failed but they have been through the process. They understand hiring is a skill. Skill built with iterations. Skill in spotting the 1% hires, making them interested and retaining them in the company longer.
2. Better decisions
Tbf, this is not only about making better decisions, but also how fast they’re made. More experienced founders understand that every decision is a measured risk. Therefore, evaluation for the potential upside (or downside) is needed. Also, when something is not working, knowing when to pull the plug is a skill on its own.
3. More established network
The value of your network compounds over time. You benefit for all the prior acquaintances, which established founders have more of. Makes it easier to hire A-players, fundraise and find customers. Quid pro quo (or a circle jerk as some call it).
4. Understanding cash
They are most likely to be trusted with capital. Worked with it previously, understand cashflow, know how to balance profitability with scaling fast and are most likely not stranded for cash at the moment.
Additionally, second time founders know startups are unpredictable. They have seen costs spiral or unexpected expenses pop up. This might rattle first time founder, however a more seasoned veteran understands the cycles.
5. Stronger product instincts
Having built a product before, they are better at spotting early signs of what users really want versus assumptions. This helps them iterate faster and avoid building features no one needs.
❗ Disadvantages come with experience, too
1. Overconfidence
Second time founders tend to be overconfident, because “they have already done it”. They might not be willing to work as hard as first time founders, and could become entitled in the process.
2. Loyalty
Building a team based on “owing someone one” is a common trap you should avoid at all costs. Even if that person worked for you at some point and it worked, he might not be suitable for your new startup. Don’t let personal feelings affect business decisions.
3. Underestimating luck factor
Because you were right the last time, does not guarantee you are now. You might fail to spot a pivot, or a significant detail the first time founder will see. Take a moment to evaluate your career to this point and understand how unlikely you were to end up where you are now. All luck.
4. Set on previous pain points
There is 100% chance you experienced a pain point in your life as a seasoned founder. What can happen is you hyper-fixating on solving these problems before you experience them, again.
The problem here is, that the new business might not experience them at all. This leads you to overcomplicating the product before you know you achieved a PMF. Not good.
5. Harder to “stay hungry”
Starting again after an exit or a big failure can take away some urgency. There’s less “do or die,” which can slow momentum, especially if personal comfort has increased.
6. Expecting easy fundraising
Having raised money before might create false confidence in the fundraising process. Every market and product is different, and not every investor will back you just because of past work.
7. Bias toward familiar
It’s common for experienced founders to go after what they know best. This limits new bets and can stop them from exploring higher-growth spaces or new ideas outside their comfort zone.
8. Ignoring small details
When you’ve done it all before, it’s easy to overlook small problems that pile up. First time founders often obsess over details; experienced founders might skip some and get burned later.
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