By: Nate Bek
It’s easy to fall in love with building a company. There’s a problem to solve, an ocean to boil. But soon, the startup path shows itself — a winding road filled with unexpected potholes and distractions.
Sometimes, you just get stuck.
Dave Hersh knows that feeling. He built Jive Software and took it public, but the push to scale and meet expectations came at a price. He has since gone on to work in venture, private equity, and now helps transform stuck companies.
“At Jive, we went from being focused on innovation to operating for quarterly numbers,” he says. “That's when the slow death began.”
Founders often feel the need to prove themselves. Hersh was no different.
“I was insecure and scared of trusting my intuition,” he says. “I thought, ‘If I lose, I’m worthless. So anything to avoid that’”
This drive to win can lead to short-term decisions that create long-term issues: launching products too soon, scaling too fast, raising too much, and telling investors a story that’s a bit too rosy.
“There's this belief that success means raising a lot of money fast, growing quickly, and chasing a big market,” Hersh says. “Those are the things I pursued. But looking back, it turned out not to be the case, and it sowed the seed of destruction for me and many others.”
Hersh recently joined Ascend for an AMA, a monthly session where portfolio founders hear from experts. He shared lessons about avoiding false stories, knowing when to grow, and trusting your gut. You can find the full audio recording here — Passcode: wGgU&.86
False Narratives Can Sink You
Founders often shape stories to raise money, but those narratives can come back to bite. They set unrealistic expectations with investors and then scramble to meet them, losing sight of what the business actually needs.
As Hersh puts it, “You’re raising the money on a false narrative, and that false narrative belies a deeper truth, which is, you don’t have market pull yet.”
Focus on aligning your story with reality, not just what you think investors want to hear.
Scale Responsibly
Scaling prematurely can be a costly mistake. Hersh tells the story of Docsend in his book, a company that raised $8 million and jumped into aggressive growth. The strategy ended up backfiring.
“They described it like trying to play a golf tournament with clubs that were half the size,” he says.
The company couldn’t compete effectively and burned through cash chasing larger competitors until they went back to their roots, got lean and focused, and rebuilt the organization around their superpower. And a few years later sold to Dropbox at a large valuation. Scaling should be a response to real demand, not a decision driven by available capital. Make sure your clubs are ready before you take on the course.
Avoid Raising Too Much Money Too Soon
Venture capital isn’t the enemy, but too much, too early, can be destructive. Founders sometimes raise large rounds of funding before fully validating their product, which creates pressure to grow faster than is feasible.
“Most of the money in VC is made from 10% of companies being profoundly successful,” Hersh says. “But for the individual founder, you don’t have a portfolio — you have your one company.”
This creates a misalignment between founder and investor timelines. While investors are betting on many companies, founders are betting on one. Be patient, raise only what you need, and don’t let the funding drive your strategy.
“Stay leaner longer, find market pull, and then raise when it’s irresponsible not to,” says Hersh.
Focus on value creation, not vanity metrics.
Metrics can be a trap. It’s easy to get lost chasing numbers that look impressive in a pitch deck — user counts, downloads, glowing reviews.
“I spent so much time hacking soft metrics,” he says, “but none of that moved the needle for the business.”
Stick to Your Core
A founder’s intuition is the most critical, and most undervalued asset.
Hersh reflects on this, saying, “if I had just been able to develop my intuition, been more strong in my conviction... as the founder, as CEO, you have more information than anybody else, and you understand narratively how it all fits together on a larger scale.”