Entrepreneurs Who Don't Want Venture Capital

from the understanding-the-system dept

It seems like every few months a story just like this one show up somewhere about entrepreneurs (usually ones who have gone through the process before) are starting new companies without venture capital. The reporter (like in most of these articles) tries to make it out like this is a big conflict between those who “know better” and the venture capitalists. The truth seems quite different – and the story isn’t supported by any of the actual quotes. Certainly there are entrepreneurs who get screwed by VCs, and there are many who go into the process the first time without realizing what they’re giving up when they accept VC cash. However, the truth is that many businesses (and certain entrepreneurs) aren’t right for VC money. Understanding what VCs are looking for, and what the process is like is important for anyone raising money. Then the entrepreneur can make the right decision about the best way to move forward. Sometimes that’s with VC cash and sometimes it isn’t. Everyone quoted in the article seems to understand that, but that’s not as interesting a story for the paper. What would be better is if the press stopped making the implicit assumption that to do a startup you need to raise venture money – and that the companies that raise more money are the automatic powerhouses.

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