The Startup Myth That’s Costing Founders Everything: Family Dinner with Chris Sell

To most, a high-profile acquisition screams success. But as Northwestern alum Chris Sell revealed in his inside look at startups, even a flashy exit can leave a founder empty-handed.

“The investors get the money before the founders or the employees get a dollar. That’s why it is actually very common for startups to end up with what I call  the ‘successful zero,’” Sell told Residents at Family Dinner at The Garage on Tuesday. “The story I told you, you’d think the founders and employees were millionaires. In actuality, they all got the goose egg.”

Sell is the Co-Founder of GrowthLoop, a compound marketing company that helps brands like Google, The Red Sox, and Indeed utilize AI to orchestrate marketing campaigns. GrowthLoop recently won the 2025 Google Cloud Partner of the Year for Data & Analytics – Business Intelligence.

Speaking in 90s pop culture metaphors and startup shorthand, Sell emphasized to Residents that while venture capital is one way to grow a successful startup, it is not the only way.

Yet current startup culture, fueled by LinkedIn hype posts and bold headlines celebrating massive funding rounds, can convince founders that there is only one path forward.

“That one way is to raise a seed round, then raise a Series A, then Series B, C, and D – they put in the letters of the alphabet, it’s a very clear path – become a unicorn, then try to IPO and hang out with Mark Zuckerberg,” Sell said.

Many founders may feel pressured to raise large funding rounds without understanding the trade-offs, according to Sell. One of the most important? Control.

“If you take more capital to build your business, you will give up more control. It’s the law of the land,” Sell said. “What you want to ask is, I wonder what control of the business they had to give up to get that funding?”

While Sell emphasized that the VC path is not for all, he gave Residents guidelines to look at their business “clear-eyed” and determine whether their model would be well-suited for VC-funding.

Namely, businesses with low-friction coefficients within software are often more VC-friendly than hardware or high-cost services, which are less likely to be “scalable to the moon,” according to Sell. VCs are typically underwriting at least 8-10 times return on investments in individual startups. So, they need the winners in their portfolio to scale quickly into “grand slams”. If you do raise venture capital, ask what outcome they are underwriting for your startup. And then think to yourself, does that align with my goals?

“Am I saying never to raise VC capital? No, that’s not what I’m saying. It is a great tool for entrepreneurs in specific cases. However, it is one of many founder paths you should treat with equal consideration,” Sell said. “The thing that I think is sad is that it’s treated like it’s the only one out there for you.”

After leaving his job at Google to focus on a venture-backed startup later acquired by Pinterest, Sell decided to lean into bootstrapping his company profitably working closely with customers.

But finding motivation while paving an uncharted path for funding isn’t easy.

“If you choose a different set of goals and funding model, you have to create the guide posts for yourself and your team to keep yourself on track. You have to remind your co-founders and your team every single day about those guide posts, because they are not the norm. They don’t hear about them every day in the news. So you need to make them matter,” Sell said.

Before raising a dime for their venture, Sell urged Residents to answer one question: “Does the source of the money to run my business align with my well-being and the outcome I desire?”

“Most entrepreneurs just take it as a default. They want to become a unicorn, and they work backwards from there. Instead, ask it the opposite way,” Sell said. “Does the source of money align with what you want?”