Expansion capital solves your company’s constraint only when the money funds a plan you already understand. If accepting it requires a new market, a larger team, and growth targets built around the investor’s timetable, the term sheet may be replacing your plan with someone else’s ambition.
In 2017, WeWork was already growing when Masayoshi Son met Adam Neumann and invested through SoftBank. Son wanted greater speed and scale. Neumann accepted the capital and pursued that ambition across more locations, more employees, and businesses far beyond renting office space.
The outcome remained uncertain until WeWork prepared to go public in 2019. Its filing exposed large losses, unusual governance, and the distance between its valuation and the economics of the business. The initial public offering was withdrawn. Neumann stepped down as chief executive.
Eliot Brown and Maureen Farrell document the decisions in The Cult of We. Their account matters because the capital did more than extend WeWork’s runway. It changed what the company believed it had to become.
The constraint the money must remove
A founder in Accra receives a term sheet on Friday. The investor wants an answer by Monday.
The first question will probably be about valuation. I would start elsewhere: what specific constraint does this money remove?
Perhaps customers are waiting because one engineer owns every deployment. Perhaps a reliable sales channel exists in Ghana, but the company cannot support the implementation work. Perhaps regulatory review is delaying contracts while payroll keeps running. Each problem points toward a different use of capital.
“Expansion” does not.
If the company has already found repeatable demand and lacks the capacity to serve it, capital can buy that capacity. The founder should be able to name the hires, product work, or market tests the money will fund, then explain what evidence would justify the next tranche of spending.
If the company still does not know why three promising pilots failed to convert, more countries will create more versions of the same uncertainty. The funding may extend the runway on paper while shortening the time available to understand the original business.
That distinction also matters when a founder is considering an overseas customer before the operating model is ready. Kojo’s decision about chasing a US customer had the same underlying tension: new revenue can reveal a path, or pull the product away from the customers already teaching you what works.
Read the operating plan hidden inside the term sheet
A term sheet contains an implied company, even when the document focuses on ownership, governance, and investor protections.
The cheque size implies a spending pace. The expected return implies a growth curve. Board rights influence who can approve the next major decision. Future fundraising assumptions shape when the company must show progress, and which kind of progress will count.
By Sunday evening, I would put two operating plans side by side.
The first would show the plan before the term sheet arrived: the next product milestone, the customers being pursued, the team required, the monthly cash exposure, and the evidence needed before expansion.
The second would show the company the investment appears to require.
Where do the plans diverge? Does the funded version add a sales team before the founder has found a repeatable sales motion? Does it open another market before support works reliably in Accra? Does it commit to a hiring plan that becomes dangerous if the next round takes longer than expected?
This exercise should expose the real decision. The founder is choosing which set of assumptions will govern the company after Monday.
Separate reversible expansion from permanent obligation
Some uses of capital can be tested and reversed. A limited market trial can end. A contractor can cover a defined implementation gap. A product experiment can answer one question before the company commits to a larger build.
Other decisions remain expensive after the evidence changes. Full-time hires create recurring obligations. A new office adds cost before demand is proven. Custom work for a prestigious buyer can move the roadmap away from the customers who already pay.
I would divide the proposed expansion into stages, each tied to evidence the company can observe. Release hiring after signed demand. Increase market spending after one acquisition channel produces repeatable results. Build the larger automation layer after the manual version shows where customers stall.
This is the same discipline required when runway and an external approval move on different clocks. A delayed compliance decision can outlast the cash available to wait for it. Capital helps when it creates room to resolve that dependency. It hurts when it adds obligations before the dependency clears.
Decide what Monday authorizes
The WeWork story carries a larger warning than “grow carefully.” SoftBank’s money reinforced a particular definition of success, then gave WeWork the capacity to pursue it at unusual speed. Once the company reorganized around that ambition, reversing course became harder.
The founder in Accra should therefore write one page before replying.
It should name the current constraint, the evidence that expansion is ready, the first use of funds, the spending that remains conditional, and the decision rights the founder needs to protect. Any assumption introduced by the investor should appear plainly, especially the ones concerning geography, hiring, and the next fundraising round.
Then Monday’s answer can be precise. Accept the capital if it gives the working plan enough time and capacity to succeed. Renegotiate or decline it if the money only works after replacing that plan with a larger story the company has not yet earned.
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