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The Financial Folks: Enabling Innovation
from the is-it-true? dept
Personally, I've always thought that startups rely way too much on venture capitalists and investment bankers. We've built a culture where investment is being equated with revenue for a company, and that's dangerous for anyone who wants to build a long term successful business. I cringe when I hear someone refer to a company as a "success" based on how much money they've raised. I'm much more interested in how much revenue they've brought in, how much they've grown, and how much profit they've made. However, plenty of companies still rely on the financial folks to help them out, and Red Herring started asking what they want out of their investors. It seems that these companies want to sound less desperate than they really are, as they listed "guidance" as being more important than the cold cash VCs and investment banks provide. Even the writer of the article doubts how many startups would give up that extra million bucks in exchange for a little helpful advice. Thankfully, the article does mention that some successful companies avoid the venture capital/investment bank route altogether.
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You're absolutely right. Startups have limited time and resources to pursue their goals. They can be focused on product development and refining a sales pitch that's going to work with customers, or they can be working on a pitch to make investors happy. Making a pitch that sounds great to VCs isn't always the best way to build a product for the market.
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