Comments on: Do you really need Venture Capital funding?

By: Alex

Alex — Thu, 06 Aug 2009 17:54:39 +0000

Sounds like good reasoning but in my experience can’t completely agree. Having a great idea and/or (software) product may not be enough in certain cases. Access to certaih markets may require substantial investments to reach decision-makers (enterprise).

By: Cam G

Cam G — Sun, 31 May 2009 02:47:13 +0000

Great post Antonio, absolutely could not agree more with the comment about overfunded startups. You are right, too many of them are set up with the specific aim of attracting VC funding not for the business but their lifestyle.

Contrast that to the most successful icons of our industry, the great majority of whom did it hard. By hard they put the business ahead of life style. I am convinced that is why they succeeded.

We are presently going through the capital raising process. But the dilemma is that VC’s are only interested if you want big amounts of cash.

We don’t and nor do we want it, doing it hard keeps you focused and hungry – 1 genuinely believe that is a path you must travel in order to suceed as a business

By: Marc Dangeard

Marc Dangeard — Sun, 01 Mar 2009 20:49:02 +0000

The media is brainwashing people when highlighting the successes of a Google or Yahoo, or other few who won the VC lottery. But you are right that while VCs are an option, it should not be considered like the best option. From Inc Magazine top 500 fastest growing companies, only 6% have received VC money. So there are 94% of companies that do very well without them. AND the average capital needed to get the company there was $75K.

Another interesting number:
– 4 years survival rate for startups is 43%
– success rate for VC funded companies is closer to 10%

You are right that too much money contributes to failure…

By: rmk

rmk — Thu, 26 Feb 2009 08:44:00 +0000

Agreed that some don’t need funding to get to first base and even maybe to second base. But there are many that would need funding before the public can start using it.
Example: Google which would have needed a substantial capex to create their database so that their initial users are not disappointed with the limited search results. Even Twitter needed to spend cash to make themselves scalable so that outages were minimized.
Some ideas need to be funded, some don’t need much funding. The VC needs to figure out how much is too much. Shouldn’t be giving the kids what they ask, should give them what they need.

By: Daniel Cimera

Daniel Cimera — Tue, 24 Feb 2009 20:39:03 +0000

Very interesting post, you make a good point.

By: andreacgranata

andreacgranata — Tue, 24 Feb 2009 20:09:07 +0000

Inspiring post! Thanks Antonio.

By: Carlo Pecchia

Carlo Pecchia — Tue, 24 Feb 2009 18:30:51 +0000

Maybe you already know it: similar ideas are present in 37Signals (excellent) book: http://gettingreal.37signals.com/.

As always a nice post…thanks! 😉

By: Al Chou

Al Chou — Tue, 24 Feb 2009 14:45:23 +0000

_Starting on a Shoestring_ espoused the same idea: it’s better to have too little funding than too much. It forces you to make hard, smarter choices.

http://www.amazon.com/Starting-Shoestring-Building-Business-Bankroll/dp/0471232882/ref=sr_1_2?ie=UTF8&s=books&qid=1235486492&sr=1-2