Asher's Blog

One of the questions I was asked recently was what founders tend to overcomplicate when building companies and what they tend to underestimate. I think the contrast is very interesting because founders often spend an extraordinary amount of energy on the things that are most visible—fundraising announcements, hiring plans, titles and expansion—while giving too little attention to the quieter foundations that determine whether the company will survive.

The first thing founders tend to overcomplicate is the need for capital. Many people become so determined to raise equity or debt that fundraising begins to feel like the business itself, even when there may be other ways to keep the company healthy. The second is hiring, because founders sometimes assume every new problem requires another employee, and then construct a complicated recruitment process without first defining the result the person must produce.

At the same time, founders underestimate compliance, the full cost of operating a business and the importance of written agreements between co-founders. They underestimate these things partly because nothing dramatic may happen when they are neglected on the first day. The consequence arrives later, when the company is larger, the relationships are more valuable, the mistakes are more expensive and the available choices are fewer.

My general lesson is that founders often make the visible things more complicated than they need to be and make the foundational things more informal than they should ever be.

Fundraising is not the same as building a company

Capital is important, and some businesses cannot be built without significant external funding. A refinery, telecommunications network, manufacturing plant or pharmaceutical company cannot usually be financed in the same way as a small consulting firm. Even a software company may need capital to hire strong engineers, complete regulatory requirements, serve large customers or expand into new markets before revenue can finance the entire journey.

The mistake is not raising money. The mistake is assuming that money is always the first or only solution to a business problem.

When a founder says the company needs capital, I want to understand exactly what the capital is meant to accomplish. Is it financing an already proven acquisition channel? Is it completing a product customers are waiting to buy? Is it supporting working capital for signed and profitable contracts? Is it satisfying a regulatory capital requirement? Is it purchasing equipment that will generate predictable income? Or is it merely providing more time for the company to continue operating in the same way that has not produced results?

These are very different situations. Capital can accelerate a working system, but it can also postpone the moment when a founder has to admit that the system is not working. If the business has leakages, poor pricing, weak collections, unproductive employees, excessive infrastructure costs or products that customers do not value, raising money without correcting those problems makes them larger and more expensive.

Before beginning another fundraising process, I would therefore ask whether the company can create breathing room internally. Can it collect outstanding receivables faster? Can it ask for deposits or annual prepayments? Can it remove a product that consumes support without producing meaningful revenue? Can it renegotiate a supplier contract, reduce waste, dispose of an unused asset or stop subsidising customers who are unlikely to become profitable? Can it offer a carefully chosen service that generates cash while strengthening the core product?

Blocking leakages is not a substitute for growth, but it can put the company in a much better position to raise capital. A business with improving margins, disciplined expenditure, stronger collections and a clear path to profitability tells a better story than one asking investors to finance unresolved confusion.

The best time to raise money is before desperation

Fundraising becomes especially complicated when a company waits until it has almost no cash. Desperation weakens judgement and bargaining power. The founder may accept the wrong investor, excessive dilution, restrictive debt, unrealistic milestones or governance terms that create problems long after the immediate cash crisis has passed.

Preparing for capital is therefore more important than constantly pursuing it. Preparation means maintaining clean accounts, knowing the company’s unit economics, having credible forecasts, organising legal and compliance records, understanding the cap table and being able to explain precisely how the money will change the business. It also means building relationships with potential investors before the company urgently needs their cheque.

The founder should decide what kind of capital fits the need. Equity can be appropriate for uncertain, long-term growth where repayment cannot be scheduled confidently. Debt may fit predictable cash flows or working-capital cycles, but it is dangerous when used to fund an unresolved operating loss. Customer financing, supplier credit, strategic partnerships, grants and founder capital can each be useful in the right circumstances. Money has a cost beyond its interest rate or dilution because every source introduces expectations, timelines and influence.

The question should never be only, “How much can we raise?” It should also be, “What will this capital require from us, what risk does it introduce, and what measurable milestone will the company reach before we need more?”

Money raised is not a badge of success

Founders also overestimate what fundraising proves. An investment announcement means that investors have purchased a possibility; it does not mean that customers have validated the business, that the economics work or that the company will survive. The valuation is a story about the future, while operating performance is the deadline by which that story must begin to become true.

Capital can create a dangerous sense of abundance. The company moves into a larger office, hires ahead of need, enters several markets, sponsors events and builds products for hypothetical customers because the bank balance appears strong. Each decision may be defensible in isolation, but together they can turn a focused company into an expensive organisation before it has found a repeatable engine.

This is why constraint can be valuable. Constraint forces the founder to identify what customers genuinely need, what the company is uniquely positioned to provide and which activities generate the strongest return. It does not mean that poverty is a strategy or that founders should celebrate being underfunded. It means money should remove a known constraint rather than remove the discipline to think.

There are many well-funded companies that have closed, and many durable companies that grew primarily from customer revenue. The useful conclusion is not that venture capital is bad or bootstrapping is morally superior. The conclusion is that financing cannot repair a business whose customers do not care, whose unit economics deteriorate with growth or whose leadership does not allocate capital responsibly.

The true badge of success is a sound company: customers receive important value, the business captures enough value to sustain itself, employees can do excellent work, obligations are met, investors are treated responsibly and the company becomes more resilient as it grows.

Founders hire before defining the work

Hiring is another area founders tend to overcomplicate. When the workload becomes uncomfortable, the immediate response is often to add another person. However, a founder should first ask whether the problem requires a full-time employee, a better process, automation, a consultant, a temporary specialist or a clearer decision from leadership.

An employee is not merely a monthly salary. The company must recruit, onboard, equip, manage, develop and retain the person. There are taxes, benefits, software, workspace and management time. A poor hire can also create errors, weaken culture, distract strong colleagues and require the company to repeat the entire process after several months. Hiring before the work is sufficiently defined transfers the founder’s confusion to another person and then punishes the person for failing to solve it.

Before opening a role, I want to know the outcome the person will own, why the existing team cannot produce it, what excellent performance will look like after ninety days, and what evidence suggests that the role will create more value than it costs. If those answers are unclear, writing a longer job description will not solve the problem.

Founders should also consider whether they can borrow talent before permanently adding cost. An experienced consultant can solve a defined problem, train a younger team and help the company discover what the eventual full-time role should contain. A partner can provide distribution or technical capability that would take years to build internally. The important thing is not to avoid hiring; it is to hire when ownership, workload and economics justify it.

Hiring becomes simpler when outcomes are clear

Founders often ask how to spot the right employee, and there is no perfect method because human beings are not entirely predictable. Interviews can reveal how well a person presents, but presentation is not performance. References can help, but people naturally choose referees who will speak positively. Assessments can provide useful evidence, but they cannot reproduce every pressure and relationship the person will encounter after joining.

The strongest starting evidence is relevant performance. Has the candidate solved a similar problem before? What exactly did they own? What was the starting situation, what actions did they personally take, and what measurable result changed? A candidate who says, “We grew revenue by ₦5 billion,” should be able to explain the team, their own contribution, the customer segment, the timeline and the decisions they controlled.

Past performance does not guarantee future success because context changes, but it is stronger evidence than confidence alone. Where a candidate has not done the exact work before, the founder should look for adjacent achievement, learning speed, judgement, responsibility and the ability to produce a small version of the required result.

After hiring, the process should not become mysterious. Give the person a clear mandate, the authority and resources necessary to perform, and agreed outcomes for the first thirty, sixty and ninety days. Review progress frequently enough that neither side is surprised. If the person is producing meaningful progress, remove obstacles and continue to support them. If the evidence consistently shows that they cannot perform the role, make the decision early and humanely, subject of course to the employment agreement and applicable law.

I have had to let people go within the first forty days because it became clear that the expected result was not going to happen. That is not something a founder should enjoy, and it should not be done impulsively. The company must examine whether the goal was realistic, whether the person received adequate context and whether leadership provided the promised support. Once those conditions are satisfied, keeping someone indefinitely in the wrong role does not become kinder with time. It increases the eventual pain for the person, the team and the business.

The ninety-day period is a test of the company too

A probation or early-performance period should not only test the employee. It should test the quality of the company’s leadership. Can the founder communicate what matters? Does the person have access to the information required to do the job? Are decision rights clear? Does the manager give useful feedback? Are other teams cooperating where the outcome depends on them?

This is important because founders sometimes blame an employee for a system that makes performance impossible. A sales leader cannot produce predictable revenue when pricing changes every week, the product fails during demonstrations and contracts wait months for approval. An engineer cannot deliver reliably when priorities are replaced daily and no one defines what “finished” means. A compliance leader cannot protect the company if executives repeatedly override the controls they asked the person to build.

Simple hiring does not mean careless hiring. It means replacing vague impressions with evidence, defining outcomes before titles, and making decisions when the facts become clear.

Compliance is cheap until it is ignored

Compliance is one of the most important things founders underestimate, especially during the early stages of a company. It can feel like paperwork that slows down product and sales, so the team postpones tax filings, employment documentation, data-protection controls, licences, statutory remittances and financial records until someone asks for them.

The difficulty is that compliance debt compounds. A missed filing can attract penalties; unpaid statutory obligations can accumulate interest; poorly collected customer data can become a security or regulatory exposure; informal employment arrangements can create disputes; and operating without the correct licence can threaten an entire product. By the time the company is preparing for due diligence, the problem may be too large to explain as an innocent oversight.

For African founders, this deserves particular attention because businesses may operate across jurisdictions with different company, tax, labour, pension, data and financial-services requirements. Expansion into another country does not simply add customers; it can add a new legal employer, tax presence, reporting regime, consumer-protection framework and set of licences.

The solution is not for every founder to become an expert in every regulation. The solution is to build a system that makes compliance visible and repeatable. This is part of why products such as Eazipay matter. An employer should not need to become a payroll-tax, pension and statutory-remittance specialist simply to employ people responsibly; the product should translate those obligations into a dependable workflow and provide evidence that the required actions were completed.

Founders should identify the obligations capable of threatening the company, assign clear ownership, maintain a calendar, preserve records and obtain qualified professional advice where necessary. Compliance should be designed into operations rather than performed as an emergency exercise before an audit or fundraise.

Written co-founder agreements protect the friendship

Another foundational issue founders underestimate is the need for a written agreement between co-founders. People begin companies with excitement, shared ambition and trust, and they sometimes believe discussing exits, vesting, control or failure will introduce suspicion into the relationship. In reality, avoiding the conversation does not preserve trust. It leaves important expectations unspoken until the moment when emotions and money make them much harder to resolve.

The agreement should address ownership, vesting, roles, decision-making authority, intellectual-property assignment, time commitment, compensation, additional capital, transfers of shares, confidentiality, misconduct, deadlock, disability, death and what happens when someone leaves. It should distinguish a founder who has completed years of work from one who departs shortly after incorporation, which is why vesting is so important.

No template can replace legal advice suited to the jurisdiction and the actual relationship. Accelerators and investors may provide standard documents or recommendations, but they cannot have the difficult conversation on behalf of the founders. The founders themselves must discuss what happens if one person stops contributing, wants to build another company, refuses a financing decision, becomes unable to work or believes the company should be sold.

A good agreement does not assume the relationship will fail. It accepts that lives and incentives can change. By defining a fair process while everyone is still aligned, it creates room for a healthy exit and gives the remaining company a chance to continue.

Noam Wasserman’s research in The Founder’s Dilemmas demonstrates why these early choices matter so much. Decisions about relationships, roles, control and rewards can create consequences that appear only after the company has become valuable. Informality feels easy at the beginning precisely because there is not yet much to divide; unfortunately, that is also the least expensive moment to agree on the rules.

Founders underestimate the true cost of running a business

Many business plans contain the obvious expenses and omit the costs that arise between the spreadsheet and reality. Salary is included, but recruitment, benefits, equipment, software, taxes and management time are not. Cloud hosting is included, but security, monitoring, backups, support and compliance certifications are ignored. The cost of manufacturing is included, but returns, spoilage, delivery failures, foreign exchange and working capital are not.

The result is a company that appears profitable at the unit level until it begins to operate. The founder then discovers that selling the product requires discounts, implementation, after-sales support, travel, commissions and months of financing before the customer pays.

This is why I pay close attention to cost per customer, cost per employee, cost per product and cost per sale. I want the fully loaded cost, not the most attractive version of it. I also want to understand how the cost changes as the company grows. Some costs decline with scale, some increase in steps and others emerge only when the business becomes large enough to attract regulation, fraud or operational complexity.

Underestimating cost leads directly to underpricing, inadequate capital and poor decisions. A company may appear to have a sales problem when the real issue is that it cannot profitably serve the customers it is winning. The founder should therefore build realistic scenarios, add room for uncertainty and update assumptions with actual operating data rather than defending an outdated plan.

Simplify what is visible; formalise what is foundational

The pattern behind all these examples is relatively simple. Fundraising and hiring are activities, not outcomes. They should be undertaken when they remove a defined constraint and produce a measurable result. Compliance, agreements and cost discipline are foundations; they should be established before their absence produces a crisis.

Before raising capital, block the leakages, understand the economics and decide exactly what the money will prove. Before hiring, define the work, decide whether it requires a permanent employee and agree on the result expected within ninety days. Before operating casually in a regulated area, identify the rules and assign responsibility. Before building years of value with another founder, put the relationship, ownership and exit process in writing.

This approach may look less exciting than announcing a funding round or introducing ten new executives, but businesses are not built from announcements. They are built from customers receiving value, people taking responsibility, money being allocated intelligently and promises being kept.

Founders should remain ambitious. They should raise significant capital when the opportunity and economics justify it, and they should hire exceptional people when those people can multiply the company’s capacity. But ambition becomes durable only when it rests on operational truth.

The healthiest company is not necessarily the one that has raised the most money or employed the largest team. It is the one that understands what it is building, knows what it costs, protects the relationships and permissions on which it depends, and uses capital and people to accelerate something that is already becoming true.

Further reading

• Noam Wasserman, The Founder’s Dilemmas, on the early relationship, ownership and control decisions that shape a company’s future.
• Eric Ries, The Lean Startup, on validated learning and using resources to test consequential assumptions.
• Jim Collins and Morten T. Hansen, Great by Choice, on productive discipline, empirical creativity and managing uncertainty.

• • Karen Berman and Joe Knight, Financial Intelligence for Entrepreneurs, on understanding the operating assumptions beneath financial statements.