Posted under Venture Capital
from http://cdixon.org 738 days ago

Tech startups go in an out of fashion. When they’re in fashion, as they are now, entrepreneurs and VCs get lots of attention. Most of this attention focuses on things that involve money, like financings and acquisitions. For some entrepreneurs, raising venture capital becomes a goal unto itself, instead of what it should be: a heavy burden that only makes sense in certain cases.

A startup should raise venture capital (or “venture-style” angel/seed funding) only if: 1) the goal is to build a billion-dollar (valuation) company, and 2) raising millions of dollars is absolutely necessary or will significantly accelerate growth.

There are lots of tech companies that are very successful but don’t fit the VC model. If they don’t raise VC, the founders can make money, create jobs, and work on something they love. If they raise VC, a wide range of outcomes that would otherwise ...

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