Funded to Survive,
Not to Finish.

Last week Goterra went into voluntary administration. They were the Canberra ag-tech company turning food waste into animal feed using robotic insect farms. According to SmartCompany they’d raised over A$8M from venture funds, taken a A$10M bridging round back in 2023, and closed a A$2.25M crowd round last year, so call it A$20M-plus all up. They had Woolworths, the City of Sydney and Melbourne Airport as customers, plus a new partnership with a big Sydney hotel. By their own account they just burned through their runway before the next round came in.

Most of the reaction I’ve seen has been about the amount of money. Mick Liubinskas from Climate Salad said on LinkedIn that Australia doesn’t back itself. Kate Gaffney at AxleTree Capital made the point that clean-economy companies often get stuck after the startup phase, once the bills get bigger and the next kind of money is harder to find. Her colleague Matthew Williams talked about the gap between family offices writing A$5M cheques and infrastructure funds writing A$200M ones, with not much willing to sit in the middle.

That’s all fair. But after a fair few years watching money come into companies I’ve been part of, I think there’s a second problem sitting underneath the first one, and it gets talked about a lot less. It isn’t really how much money turns up. It’s the shape it turns up in.

Runway and finishing are not the same thing

Almost every funding conversation I’ve sat in optimises for runway. How many months until the cash runs out. It’s the number the board watches and the number the CEO reports, and it’s the number every cost-cutting exercise gets measured against. “This change buys us another six weeks.” I’ve said versions of that sentence plenty of times myself.

“Runway is a measure of how long until you die. It says nothing about how close you are to actually being finished.”

You can have loads of one and almost none of the other. What actually saves a company is getting the product properly done and out in the market, to the point where it starts pulling its own weight. And for a lot of businesses the cost of getting there isn’t smooth. It comes in a lump. You can’t half-build a regulated production line. A quarter of a maggot-processing robot processes no maggots at all. The cost of finishing is one big indivisible step, and until you’ve taken it everything you’ve spent is tied up in something that doesn’t yet work on its own.

So when you fund a lumpy cost with a drip, a bit now, a bit on the next milestone, a bit when the term sheet finally clears legal, you can spend real money for years keeping a half-built thing alive without ever buying the step that would let it stand up. You end up with a long runway and an unfinished product at the same time. It reminds me of paying the minimum on a credit card. You stay solvent this month and you never actually get ahead.

I watched this happen at Cellnovo

A lot of this I learned the hard way at Cellnovo. I co-founded it and spent 19 years there. I was never the CEO, but I was in every board meeting and had a hand in most parts of it over the years: product development, regulatory affairs, manufacturing, and the clinical side working with our key opinion leaders. It’s a connected insulin pump business, and about as lumpy a product as you can build. A wearable medical device for type 1 diabetes, regulated to the hilt, with a manufacturing line to stand up and clinical and approval hurdles to clear before any of it counts for much. You can’t ship most of an insulin pump. It either works to the standard a regulator and a patient with a chronic condition will accept, or it does nothing at all.

The company was publicly listed in the end, but where this bit hardest was earlier, before we ever listed, round to round in private. The money tended to come in shaped for survival rather than for finishing. Enough to keep the lights on and hold the team together, rarely enough in one go to clear the next big indivisible step in a single motion. So timelines slipped. Not because anyone was slacking, but because you can’t half-fund a step that only exists whole.

And the slip cost us twice. Once in the obvious way, more time and more burn. Then again at the next raise, because missing the timeline we’d set ourselves came straight off the valuation. The sharpest version of this for us was manufacturing. We were supply constrained, still making product off a pilot line, and the step we actually needed was large-scale production. That step doesn’t come in slices. You either fund the line that lets you make the volumes, or you stay stuck making a fraction of them and telling everyone you’ll get there next quarter. We’d go into a round having said we’d be at scale by now, sitting well short of it, and the discount was immediate and unforgiving.

Going public didn’t fix any of that. It just moved it into a more visible arena. Instead of explaining a missed milestone to a room of investors at the next raise, you end up explaining it in quarterly reports, in front of everyone, and the share price marks you down in real time. Same dynamic, wider audience.

The bit that took me a long time to see is this. It’s easy to overpromise when the money is the wrong shape. When capital arrives in slices, you plan around the slices. You tell the board, and you tell yourself, that the next slice gets you to the milestone, because that’s the money you can actually see in front of you. But the milestone needed the lump, not the slice, so the date you committed to was never really achievable. You didn’t overpromise because you were dishonest. You overpromised because the shape of the money quietly set the expectation, and the shape of the work refused to go along with it.

The drip isn’t stupid, though

It would be easy to turn this into a story about nervous investors, and I don’t think that’s right.

Staged money exists for sensible reasons. Releasing it against milestones keeps everyone honest. It caps the investor’s downside until the next bit of evidence shows up, and it stops a big cheque getting spent badly, which does happen. Investors can’t fully see whether a team will deliver, so they buy that confidence in instalments instead of all at once. For a lot of software companies, this is the right approach. You ship a bit, you learn, you earn the next bit. The drip is doing its job.

The trouble starts when the drip gets applied to everything, as if every business had costs you could slice up thinly. Some plainly don’t. The lean, ship-a-slice thinking that works so well for software falls apart on anything with a hard finishing line: hardware, regulated products, physical infrastructure, the kind of unglamorous deep tech Gaffney calls the “draught horses” of the economy. For those, a slice of money just buys a slice of a machine that does nothing until it’s whole.

So I don’t think the lesson is “be braver with the cheque book,” at least not on its own.

The A$150M New Industries Fund that AxleTree is raising for water, waste and energy is one attempt at that. It is money built to wait, because the work it pays for is lumpy by nature.

Founders do it too

Investors aren’t the only ones reaching for the runway number. Founders reach for it constantly, and I’d put earlier versions of myself near the front of that queue.

Runway is the number that keeps a board calm and keeps a CEO in the job. Saying “we’ve extended our runway” feels like progress because it lowers the odds of dying this quarter. It’s safe to say and easy to defend, and taking another thin slice feels like the careful, responsible thing to do.

“Being careful in a way that never gets you to the finish line isn’t really careful. It’s just a slower version of failing.”

The harder thing, and honestly the actual job, is to say out loud what it takes to finish. To put it to a board plainly: here’s the lump that gets this done and able to stand up, here’s why a fraction of it gets us a fraction of nothing useful, and here’s how the money needs to be shaped to clear it. That’s an awkward conversation. You’re giving up the comfort of a long runway in exchange for the risk of asking for the whole step at once. But if the product has a real finishing line, it’s the only conversation that ends with something finished.

Or move the finishing line closer

There’s a third option that neither side talks about much, which is to change the cost so the finishing line isn’t so far away to begin with.

A lot of why the missing middle hurts is that getting to finished has usually been expensive. Long build cycles, big teams, everything custom. Bring that cost down and the lump gets smaller. A venture that can get to a working, billing product in weeks instead of years needs a smaller cheque to cross its line, because the line itself has moved.

That’s the bet we’re making with Quokkacorn, and I’ll be honest that it’s a bet rather than a proven thing. We got a bit bored of the unicorn hype. The thing that interests us is smaller: useful, paid software businesses run by people who already know their niche inside out. If you can build those cheaply enough to actually finish them, on terms that don’t bleed the founder dry, the funding problem gets less dramatic. You’re not begging the market for a heroic lump to drag a half-built thing over the line. You get to a paying customer fast enough that the product starts paying for its own next step.

None of that would have built Goterra. They needed real, patient, lumpy money, and the market couldn’t pull it together in time. That is a genuine shame. The missing-middle crowd are right to be annoyed about it.

But for the much larger number of ventures that don’t need a factory, that just need a finished product and someone willing to pay for it, I think the lesson carries over. Stop fixating on the date the money runs out and start thinking about the distance to something that actually works. Fund the finish rather than the runway. And where you can, build the thing so the finish was never that far off in the first place.

Fund the finish, not the runway.

Quokkacorn is a Perth-built venture studio for operators who’d rather finish something small than fundraise forever.