San Francisco, CA – A recent social media post by Adam Spector, a prominent angel investor and serial entrepreneur, has ignited discussion within the startup community regarding the true meaning of "scrappy" from an investor's perspective. Spector, known for his work as founder and CEO of Levy, a company specializing in back-office support for startups, highlighted a critical disconnect between founders' and investors' interpretations of the term, suggesting this misunderstanding is hindering startup growth.
Spector's tweet detailed a common miscommunication observed in board meetings: "The founder heard: 'Keep doing your own bookkeeping.' The investor meant: 'Don't waste money on stupid things!'" This illustrates a core issue where founders equate "scrappy" with extreme self-reliance and cost-cutting, often at the expense of efficiency and scalability. He noted that nearly 70% of small businesses lack an accountant, believing they are "being scrappy" when they are "actually being slow."
According to Spector, investors define "scrappy" as "Resource optimization (not resource hoarding)" and "Smart spending (not no spending)." This perspective emphasizes "leverage over labor" and "systems over chaos." He explicitly stated what it does not mean: "Founder doing payroll at midnight" or "Engineers submitting expense reports," tasks that detract from high-value activities.
This sentiment is echoed by venture capitalists who prioritize a founder's ability to delegate and focus on core competencies. "When I see a founder doing their own books, I see someone who doesn't understand leverage. That's the opposite of scrappy," Spector quoted a VC partner as saying. Reputable sources like Forbes and Inc. com corroborate this, asserting that true scrappiness involves strategic delegation and efficient use of capital to scale, rather than frugality that stifles growth.
The truly "scrappy" founders, Spector explained, "Negotiate everything," "Buy only what multiplies output," "Delegate anything below their pay grade," and "Focus ruthlessly on growth." He concluded that founders who cling to every task, such as bookkeeping, are not being scrappy but "scared. Scared to let go. Scared to spend. Scared to scale." Investors seek founders who are financially intelligent and capable of building a scalable business, not just a lean one.