>I guess I'll never understand how, in this world, getting funded is some sort of end. Most people have a goal of selling their company, no? I mean, our tax c

>I guess I'll never understand how, in this world, getting funded is some sort of end. Most people have a goal of selling their company, no? I mean, our tax code is such that it makes far more sense to sell a company than to just take money out the usual way, even if you get the same amount of money total. If you sell the company, you pay a much lower capital gains rate, wheras if you take profit either as a distribution or as salary, you pay much more. (If you take profit as a dividend, you pay corp. income tax on it, then you pay capital gains on it; if you take it as salary/bonus, of course, you pay FICA and everything.) You can sell a company based on it's current earnings, or you can sell a company based on it's anticipated future earnings. When you get investors, you are doing the latter. Of course, then you need to figure out how to cash out; but certainly that's easier after getting funding than before. Personally, I'd prefer to think of it as selling (perhaps only part of) the company rather than "taking funding" - I mean, I'd be okay saying I'd stick around and help out for a number of years (for enough money, of course,) but once you have investors, it's not really yours anymore anyhow; it's more clear to all involved, I think, if you think of it as a sale. > Getting funded means you now have the cash to become a real business, rather than having a two-man team eating ramen and sleeping on the floor. See, I don't understand how businesses that can't even bring in enough money to pay their founders get funding.