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> So if the VC money is there for the taking, why not? Disclaimer: I am not a startup founder. I am not an investor. I have zero knowledge about how these thin
by thanksgiving 9y ago
> So if the VC money is there for the taking, why not?
Disclaimer: I am not a startup founder. I am not an investor. I have zero knowledge about how these things work besides from what I've read here. That being said, I thought the meta for raising money was (is?) that you don't raise money if you don't need it or don't anticipate you will need it?
I mean if you're Dropbox, you have massive infrastructure spending even in your early years that means as you get people to learn to embrace "the cloud" in early 2009, success is you have tons of users who use your product for free with a small fraction converting to a paid account and a smaller fraction using it at work (fancier paid account) I can understand the need to raise money. However, I thought raising money means the founders lose control of the majority of shares. My understanding is if you don't need the money, don't raise it because it is a liability. I can't imagine slack's infrastructure spending being anything near dropbox's (or maybe I am wrong?)
Now that I think about it again, I am sure I have made a mistake somewhere in my assumptions. I'd love to be corrected. Thanks
Edit: How did Snapchat and Uber founders manage to retain control even after many rounds of funding? Is that applicable here? Can I use the same thing if I ever become a founder?
- argonaut 9y ago> that you don't raise money if you don't need it or don't anticipate you will need it? Slack anticipates they might need the money in the future.
- chii 9y agoOr, you raise when you don't need it, so that you don't get shitty terms, which you'd the get when/if you actually do need it!
- crwalker 9y agoCash is oxygen. It gives startups time and options. Startups are fragile, so those are great things to have on hand. The question is whether money can be raised at acceptable terms. Uber had a lot of leverage because everyone wanted to invest in Uber.