Quote: (05-17-2014 08:09 PM)El_Superbeasto Wrote:
Quote: (05-17-2014 12:19 AM)cooledcannon Wrote:
...Plus if I started a business I dont have to take loans; I can just get venture capital or raise money myself, or even find a way to get started without capital.
Why so dead set against debt financing? I'd argue that the equity you'd give up in any VC deal is much more valuable than what you'd be paying to borrow the money.
Plus you have to deal with their megalomania, and run the risk of serious headaches is if your interests aren't aligned with his. For example, a VC might be after a quick exit via acquisition while you might feel very strongly that you can grow the business and do much better down the road.
Also, raising venture capital is lot easier said than done, especially if you don't have a robust network or live in an area with lots of VCs (they hate to travel).
Im not really against borrowing. But I do think giving up equity is not a bad deal at all. At the start, equity is worth next to nothing(while money itself is worth quite alot), and after youve grown your business, you dont mind because your business has grown far more than it could without the investment.
A smaller piece of a bigger pie, in other words, which ends up being a bigger piece, probably.
I think borrowing is particularly risky as itll completely ruin you if you dont manage to find some way to pay it off. You should still have it as an option but you need to be able to make lots of money(more so than any other option)
Im sure especially with the internet there are many ways to startup a business without needing alot of capital though.
Im interested to know what your experiences are with VC(if you have them). I havent got any, ill admit, so I am curious. I also think if you are going to risk thousands of dollars into a business you should spend a few hours learning how to network and develop relationships with people who can help you out.