Venture Capital Financing

A useful perspective on venture capital,

Venture Capital

You have to ask yourself if venture capital is a realistic financing option for you. Most entrepreneurs who pursue venture capital don’t qualify and merely end up wasting a lot of time (on average from 6 to 18 months) and energy in a futile pursuit.

There are problems associated with attracting venture capital as well. A venture capital firm will in most cases fire the founder and founding team within months of a financing round. The Wall Street Journal pointed this out in a article by Barnaby Federer from September 30th, 2002:

“If you ask a VC what value they add, and you get
them after a few drinks, they’ll say, ‘We replace the CEO’ “,
he said. And that, he indicated, does not vary
with the economic climate.

 

More here.

Another useful site is Startup Junkies. We have previously discussed the Venture Capital Model in Conservation.

Advertisements

One thought on “Venture Capital Financing

  1. Saying this: “A venture capital firm will in most cases fire the founder and founding team within months of a financing round.” is too harsh a generalization.

    Applicants for venture funds are screened based on potential for success. And any recipe for this “potential for success” will include an assessment of the capabilities of the persons behind the business. Capital and management should work hand-in-hand. And if VCs don’t see good things about the business’ management, then generally, capital will not be poured in in the first place.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s