Remember my qualms about The Lean Startup; the assumption that the startup must aspire to rapid and massive growth. Here’s an interesting article that offers a slightly different view.
The siren call for many entrepreneurs isn’t money, it’s freedom. The freedom to chart your own path, the freedom to build what you want with the people you love. Taking money, building a board, and raising rounds takes away that freedom little by little. When you take venture money, you work for your investors, not yourself. You’re committing to grow fast to dominate your market and get your investors their cash back in the form of an exit or going public as soon as possible.
I was also interested to read about this alternative funding model from indie.vc
Despite sharply decreasing costs to start and scale technology based businesses, VCs continue to fund companies the same way they did 40 years ago.
And that way isn’t for everyone.
That way comes with a lot of expectations about the kind of company a founder wants to build. The kind of team a founder wants to recruit. The kind of exit a founder wants to see. And the kind of timelines a VC needs to see this all happen within.
There’s a mythology that entrepreneurs need to take VC money to hit the big time. While it’s true that some companies really do need outside capital, there are many examples of great companies that have reached revenues of hundreds of millions of dollars, or even gone public, without ever taking in capital, or taking it in only at a late stage, when they’d already created a high valuation by bootstrapping the company.
Perhaps there is a little moderation and common sense breaking out among tech startups?
[Unicorn image Creative Commons Share Alike Some rights reserved by Anley Piers]