Death Valley Curve
Categories: Company Management, Banking, Investing
Doesn’t this sound like one of those car crash songs from the 1960s? Like “Last Kiss” or "Dead Man's Curve"...
In finance, Death Valley Curve refers to a dangerous time in a startup's life (at least from the point of view of the people investing in the company). It represents the period starting when the company gets its first investment and lasts until it starts to generate revenue.
Imagine driving through Death Valley. The hottest place on Earth. Desolate. Empty. If your car runs out of gas, you'll probably end up a set of sun-bleached bones within the week.
Now, imagine the finance equivalent. You've put a bunch of money in a company with a sure-fire cure for baldness. But you still need FDA approval, then you'll need to ramp up manufacturing and distribution. At that point, the money will start rolling in. Guaranteed billions. But if the company runs out of money before the product launches, that's it. Bleached bones. Death Valley. Welcome to the Jungle.