Now is a great time to be unfundable

I think what the author is talking about is having too much money to the point where a lot of it gets wasted before a solid business model is proven.

However, I still believe that seed funding is important to most startups for the simple fact that if you have to worry about paying for groceries and food, you're not going to be able to focus 100% on your startup.

A 30k - 150k seed round could go a long way for most startups and I think is almost required just to get the basics covered.

I speak from my startup's experience. We thought we were a lock for angel funding around 4 months ago. Finally, all the answers came back, "no". We believe it was because it's our first startup, and we did indeed look like the cardboard rocket ship to investors. They loved the cardboard rocket, but weren't about to give us a quarter of a million dollars to turn it into a real rocket.

We have since gone through 3 major pivots (possibly 4, depending on how you split it). One of them was to consult in order to bootstrap -- something through which we've learned a lot about our customers. 2 of them were pretty big changes to our core business.

Interestingly, our original concept is still the long term goal. Hearing "no" from investors just made us realize that we need to build certain foundations before we can build our mansion of a company. This is likely a consequence of us being overly ambitious at the start of the project.

This one sounds different. It's by an investor, not a rejected entrepreneur.

I know, but still, it sounds a bit patronising. Sometimes you just fail and it amounts to nothing, just ignore it and go on to the next thing. I know it's hard to admit we've wasted time on something, but sometimes it just happens. Sure, you gain experience, but that doesn't mean it's better than if it had actually succeeded.

The hard part lately (last couple years) seems to be that when you have business traction it's still slow to get capital to expand. Can't get it from a bank. Getting from a VC is slow. Getting from angels works if you need $100k but not if you need $800k, and angels are ironically more likely to give you money if you have no revenue but a promising idea (since if you are actually headed up the hockey stick, your valuation is higher than they want.)

I've encountered a handful of companies that (claim to) have multi million dollar contracts on the table that they need $500k-$1m to execute on and can throw that off in the first year's profit. I'm intensely surprised there isn't more of a factoring type solution that provides asset-backed contract-backed warrant-sweetened lending at credit card like rates. Sort of an alternative asset class to the Series A/B raises.

In fact, if anyone out there wants to put $3-5M to work that way I bet I can matchmake you with five companies in a month.

(Revenueloan and On Deck Capital are the right ballpark, but don't count. Revenueloan only wants to talk to you when you already have three big deals and want capital to spin up your fourth, and On Deck is looking to do loans an order of magnitude smaller.)