Julia Collins on what too much money can teach you about building a company

Some startups view attracting investors and landing a big fundraising round as a goal in and of itself. But for Julia Collins, building a company backed by hundreds of millions of dollars in outside validation taught her that more money and faster growth aren’t always signs that a business is working.

“When you raise a lot and you’re growing quickly, it can be very challenging to slow down and to criticize and investigate what’s not working,” Collins told Founder Brew.

Collins knows from experience. As a child, her entrepreneurial parents included her in discussions about capital raises, pitches, personnel decisions, and problems they were trying to solve. As an adult, she went from being the first employee at Mexicue, a Mexican fusion restaurant that grew from a lone food truck into a buzzy chain, to co-founding Zume, a robotics-powered pizza startup that raised $445 million before shutting down in 2023. Zume’s 2018 valuation at $2.2 billion cemented Collins as the first Black woman to co-found a unicorn company.

Those experiences shaped how Collins thinks about the metrics founders use to judge whether they’re building a good business

Today, she’s the founder of Planet FWD, a sustainability startup. This time, Collins isn’t shying away from outside funding—Planet FWD raised a $10 million Series A in 2022—but she has a clearer sense of which signals matter to her, and which ones can be misleading.

This interview has been edited for length and clarity.

You’ve built businesses in very different environments, from bootstrapping Mexicue to raising hundreds of millions at Zume. How did those experiences change your definition of a “good business”?

The market that you’re operating in influences you probably more than anything else, but often can feel invisible. I look back at how we got Mexicue off the ground—it was gritty bootstrapping…but that was what the market supported at that time.

Let’s go to Zume Pizza, very different profile. Now, I’m not in Bed-Stuy, Brooklyn, cooking food. I’m in Silicon Valley building robots, very different timing.

You go out with your pitch deck, and people are like, “Here’s $10 million,” and your mind starts to get boggled. In that company, we raised hundreds of millions of dollars, but I don’t know that we actually ever got to the same level of product-market fit versus how much we raised…Internally, my metrics didn’t change. The validation that we were getting was all about how much we raised and how fast we were growing.

A good business to me still looks like a high-quality product that people love, and doing it in a high integrity way. But what’s challenging is, depending on where you are in any given point in time, the market may perceive you for reasons that are totally different.

At Zume, you had an extraordinary amount of external validation—capital, rapid growth, a huge valuation. Looking back, what did all of that validation make harder to see?

When you raise a lot and you’re growing quickly, it can be very challenging to slow down and to criticize and investigate what’s not working. There’s a sort of axiom in Silicon Valley, which is, “go fast and break things,” but it’s an incomplete statement because you should go fast, you should break things, but then you should go back and fix them.

How should founders think about how much capital to raise, rather than simply how much capital they should raise?

There’s a misperception that being a venture-backed entrepreneur means you work for yourself. You absolutely do not. You work for your board and you work for the service of your employees. Raising outside capital creates a very different path for you.

So the first is: “Should I raise capital?” The second is: “At what pace do I want to grow my business?” Because that’ll determine what kind of capital I should raise. Venture capital is jet fuel. You shouldn’t put jet fuel in a Honda Civic. When you put jet fuel in a Honda Civic, all you create is suffering.

I’ve had experiences of turning down a term sheet that was at a higher valuation for a bit more money, because I knew that another investor was a better fit for what I needed. I did that at Planet FWD.

How did you have to separate your personal identity from the company’s success or valuation and why is it important?

So much of my self-worth, frankly, was tied to how much I had raised and how we were being valued, and then right behind that is, “How fast are we growing?” That created just a lot of pain and suffering because you’re almost never growing as fast as you should be, even when you’re doing great. At any given point in time, you’re either overvalued, so you’re delulu, or you’re undervalued, so you’re depressed.

It can be really challenging to separate your identity from the identity of the company. This is particularly hard when you sell, when you wind down, or when you walk away.

You were the first Black woman to co-found a tech company to unicorn status. What pressures came with that, and how did you navigate that space?

I had never heard of a tech unicorn before I came to Silicon Valley, and I hadn’t heard of a tech unicorn when I became one. It didn’t change much for me.

What I believed I’ve tried to step into is the impact that it has for all other Black women, all other women, all other underrepresented founders, all other founders who feel and are underestimated, under-resourced, and just don’t fit in.

It’s why I invest in funds that are led by diverse fund managers, first-time fund managers. My goal has always been to take ownership of being the first, but to take ownership in a way that makes sure that I’m not the only.