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shouldn’t the relevant metric be whether they increase your chance of success more than the cost (equity) you sell them in return?
by ghufran_syed 2y ago
shouldn’t the relevant metric be whether they increase your chance of success more than the cost (equity) you sell them in return?
- tikkun 2y agoYes, and in comparison to whatever your best alternative would be (i.e. max increase of success odds of giving someone else the same equity and same time commitment).
- immibis 2y agoYes, but that is never the case with venture capital.
- edanm 2y agoYou think this is literally never the case? Raising VC money has never helped a company significantly?
- immibis 2y agoThey might help a lot, but they also take a lot of equity. Let's say you alone might get the company to a 10 million valuation, if you're good. Well, the VCs will help you get it to 100 million, but they'll take 95%.
- edanm 2y agoThose numbers are very inaccurate. But in general, yes - VCs give something and it costs something, like almost everything else in life and certainly in business. It's your job as an entrepreneur to decide if that money is "worth it". Sometimes it is, sometimes it isn't. In the end, just like borrowing money, it's a tool that you have to decide on as an entrepreneur. It's a big decision, maybe one of the biggest at first, but one of many thousands of decisions you have to make every day.