Now Is The Best Time To Start A Company

from the yeah,-well-the-valuations-are-lower dept

An interview with some venture capitalists who believe that now is the best time to start a company since all the “tourist” entrepreneurs are gone, and any new company won’t have 52 competing companies to deal with. I also found it interesting that they only want to invest in first time entrepreneurs. I agree that I wouldn’t trust many successful entrepreneurs I know to start a second business (they tend to think that they have a golden touch – and they’ve also lost that “hungry” feel), but I’m sure there are some who are good. Actually, maybe they do it right, since they let first time entrepreneurs start stuff up – but bring in the successful entrepreneurs to help things run smoothly. Also, it’s not so surprising that the VCs don’t mention one of the other reasons I’m sure they think now is a great time to start a company: the valuations are much much much lower, so the VCs can get a bigger chunk of the company for a lot less money.

Rate this comment as insightful
Rate this comment as funny
You have rated this comment as insightful
You have rated this comment as funny
Flag this comment as abusive/trolling/spam
You have flagged this comment
The first word has already been claimed
The last word has already been claimed
Insightful Lightbulb icon Funny Laughing icon Abusive/trolling/spam Flag icon Insightful badge Lightbulb icon Funny badge Laughing icon Comments icon

Comments on “Now Is The Best Time To Start A Company”

Subscribe: RSS Leave a comment
Ed says:

Other Reasons

A graph in the San Jose Mercury News shows that VC funding went way down in the last quarter, especially first round funding. Paradoxically, I think that difficulty in obtaining VC funding will turn out to be a good thing. It seems that all of the wildly successful and really rich entrepreneuers turned out that way because they couldn’t get funded, which has two benefits: first, it forces you to figure out how you’re actually going to make money (i.e. you need a real business model) and second, the original entrepreneuer ends up with a much larger slice of the pie the longer he can wait until opening the company up to outside investors.

Phillip says:

Re: Bootstrapping

Indeed. When I was starting my company (just over 7 months ago) I was offered financing from investors. I could have had a plush office in Soho, given jobs to all my friends, etc. Instead I gave up my flat and moved in with my parents, turned one of the rooms into an office filled with much equipment donated by friends, begged and borrowed finance from family and friends. I’ve signed my first client which covers my co-location costs for a year. Around 4 more customers will pay for my $10k Dell server. Then each sale will rapidly mount up to the money I would have earned employed and then ever upwards!
Different people have different management styles, and for me organic growth and retaining 100% of my company suits me.

Mike (profile) says:

Re: Re: Re: Bootstrapping

Actually… what I’ve seen happen more and more is that people start businesses by adding a “consulting” element to what they do. If you’re starting a business you tend to have some sort of expertise in the area you’re working on. So, I keep seeing companies that start with a plan for a tech product (hardware/software) that helps them do something… but instead of building it for sale at first they either just consult in that area of expertise, or they build a cheapo version which just they can use to help with the consulting. Then they funnel the cash (ooh! cash!) back into the development of the actual product. I’ve heard of at least 4 or 5 companies that bootstrapped themselves this way.

Mike (profile) says:

Re: Re: Bootstrapping

I agree. I think people who can bootstrap their companies tend to make more solid companies in the long run. There are, however, some situations where a company really does need capital investment in order to get going… Unfortunately in the last few years people just figured that *any* company needed venture capital, and that’s just not true. Bootstrapping is an excellent way to build a company – and if you need capital investments later on you’re in a much stronger position.

Add Your Comment

Your email address will not be published. Required fields are marked *

Have a Techdirt Account? Sign in now. Want one? Register here

Comment Options:

Make this the or (get credits or sign in to see balance) what's this?

What's this?

Techdirt community members with Techdirt Credits can spotlight a comment as either the "First Word" or "Last Word" on a particular comment thread. Credits can be purchased at the Techdirt Insider Shop »

Follow Techdirt

Techdirt Daily Newsletter

Techdirt Deals
Techdirt Insider Discord
The latest chatter on the Techdirt Insider Discord channel...