3 ms·
Hard to turn VC money down when it’s practically free. None of the founders I know that raised seed capital even had a business plan. Hard to turn down $1,000
by simplecomplex 8y ago
Hard to turn VC money down when it’s practically free.
None of the founders I know that raised seed capital even had a business plan.
Hard to turn down $1,000,000 when all you have to do for it is say yes. Maybe go to a few meetings, make a PowerPoint. I mean really. Some of these investors haven’t even asked for any metrics, a web app was enough. It’s... shocking how cheap VC money is.
- hsk0823 8y agoVC money is not free, there's a real cost to it, it's written on the term sheet. VC money is relatively easy money to obtain versus trying to grind for the same amount of capital yourself, but there's certainly a cost to any transaction.
- ti3 8y agoHave you raised VC money recently or in the past? Raising is far from easy - in fact the opposite in my experience. It's a full-time job for 1 person for months, or even the better part of a year. That's one founder taken away from keeping customers happy and building on the product. The cost off the term sheet is real.
- ti3 8y agoAs a founder attempting to raise pre/seed in 2018, saying yes without much in exchange for funding is how I might have imagined fundraising to be in 2012-2014. Certainly not in 2018 or 2019 without relationships w/ VCs, in my personal experience. VCs asking for order of magnitude ~$100ks ARR before a seed round in '18 and '19 makes total sense for VCs. Lower risk of failure with revenue as evidence. If we get to that point of ARR, we are closer to being a free cash flow positive business and will consider forgoing VC altogether.