Hello Innovator!

When we’re building a new venture, it’s easy to believe that any money in the door is good money. After all, it takes money to make money. But what if I told you that there IS such thing as bad money?

This week, we’ll dive into good vs. bad money and how to approach your venture-building efforts sustainably.

Here’s what you’ll find:

• This Week’s Article: Good vs. Bad Money

• Share This: What is Good Money?

• Case Study: Pandesic: When Corporate Capital Becomes a Liability

Good vs. Bad Money

Why Most Corporate Ventures Are Set Up to Fail

The biggest mistake in corporate innovation isn’t bad ideas or slow execution.
It’s the type of money we use to fund new ventures.

Capital comes with expectations.

Those expectations shape strategy, hiring, pricing, customer selection, and market entry. Most innovation teams within large orgs don’t fail because they lack funding. They fail because the funding they get — and the expectations around that funding — forces the wrong behavior.

Expectations separate good money from bad money.

How the money expects a return will shape every early decision, from pricing strategy to customer selection.

Two Types of Money

There are only two funding profiles that matter when you're building something new:

• The first type of money is patient for growth and impatient for profit.

• The second is impatient for growth and patient for profit.

Most corporate funding models follow the second pattern. There’s an expectation of fast growth in large markets, even before a venture has proven product-market fit. Ventures born in large orgs are able to tolerate losses for a long time because the parent company is profitable.

That sounds generous. But it’s actually toxic.

This approach leads teams to spend too much, hire too early, and chase big customers instead of early adopters. It encourages the use of traditional business cases and long-term forecasts in situations that require short-cycle testing and rapid iteration.

Consider the alternative. Allow a team to stay small, learn quickly, and prove their model before scaling. This doesn’t demand large markets on day one. But it does expect signal. It wants early evidence of pricing power, retention, and gross margin—even if revenue is small.

GOOD money is patient for growth and impatient for profit.
BAD money is impatient for growth and patient for profit.

What makes it good is that it creates pressure to prove the model early without demanding artificial scale. Profit acts as an early signal that the venture is solving a real problem in a way customers value enough to pay for. Growth may take time, especially in markets that are still forming, but profitability confirms the direction is sound.

Most corporate ventures never get GOOD money.

Why Corporates Keep Using the Wrong Kind

Inside large companies, capital isn’t scarce.
But it IS political.

New ventures are judged using the same metrics as mature businesses. That means stakeholders demand forecasts, estimates of addressable market size, and alignment with corporate goals.