Like all things we deal with in our profession, the choice to raise money is a tradeoff to be evaluated, not something inherently good or bad.
The cons of raising VC money? You are forced to answer to someone else to some extent. You become vulnerable to complacency and largesse for the reasons stated in the article. You put some distance between yourself and customers early, which can slow down your quest for product-market fit. You lose a piece of the equity pie.
The pros of raising VC money? A good investor can give you market knowledge you would have to learn the hard way otherwise. A war chest can give you a head start over other early-stage competitors (or establish you as legitimate among existing ones). You can take on problems that require large up-front investments. You can hire people to help you out without having to worry about your ability to pay them.
Personally? I found the tradeoff to be worth it and raised money for my current company. We worked for about 8 months without paying ourselves, and then started paying ourselves half our market rates once we had some supplementary cash in the bank. We hired a few stellar employees who knew how to do the things we needed to do but couldn’t, and now I think we’re in a much better spot than we would have been had we not raised.
But obviously it depends on the situation - just because it’s worked for us doesn’t mean it will for others. Happy to answer further questions about our founder rationale for anyone who’s interested.
The cons of raising VC money? You are forced to answer to someone else to some extent. You become vulnerable to complacency and largesse for the reasons stated in the article. You put some distance between yourself and customers early, which can slow down your quest for product-market fit. You lose a piece of the equity pie.
The pros of raising VC money? A good investor can give you market knowledge you would have to learn the hard way otherwise. A war chest can give you a head start over other early-stage competitors (or establish you as legitimate among existing ones). You can take on problems that require large up-front investments. You can hire people to help you out without having to worry about your ability to pay them.
Personally? I found the tradeoff to be worth it and raised money for my current company. We worked for about 8 months without paying ourselves, and then started paying ourselves half our market rates once we had some supplementary cash in the bank. We hired a few stellar employees who knew how to do the things we needed to do but couldn’t, and now I think we’re in a much better spot than we would have been had we not raised.
But obviously it depends on the situation - just because it’s worked for us doesn’t mean it will for others. Happy to answer further questions about our founder rationale for anyone who’s interested.