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Clarence Wooten points out why taking less venture capital is almost always a good thing for startups.
Less VC as a Strategy
Seeded on Sun Dec 11, 2005 2:23 PM EST
Article Source: Venturepreneur- Enjoy this article? Help vote it up the 'Vine.
- Public Discussion (4)
The cost of capital is always extremely high for using a VC. Only specific business models that require the value-added by a VC (expertise, connections etc.) should consider funding from VC, especially in first round where the cost of capital is the highest. Oh well.
- 1 vote
#1 - Sun Dec 11, 2005 5:04 PM ESTLess reliance on VC funding is one reason why I think this "Web 2.0" thing is for real. Programming frameworks, low hosting costs, and relevance-based advertising models that pay big bucks have all come together making it much less expensive to build very useful and valuable web applications.
Its much better to build something that doesn't cost you a ton and reap all of the profit from it than to have VC investors take their cut.
A friend of mine from high school dropped out of college after he got a few million in VC funding. He's slowly realizing just how many strings are attached and that you don't get rich of VC funds.
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