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Getting Funded with Venture Capital: Why It May Not Be Such a Good Idea

Getting Funded with Venture Capital: Why It May Not Be Such a Good Idea | Online Business Models | Scoop.it

"You are more than three times as likely to crash your startup as you are to ring the NASDAQ opening bell."

Robin Good's insight:



Rachel Chalmers illustrates five key reasons why it may not be such a great idea to get your startup funded by venture capital.


These include: 


  1. Not getting a fair hearing

  2. Rising capital means losing the YOU and giving in to financial interests as the primary drivers

  3. The majority of VC funded companies will not ever generate any venture success

  4. You are not going to have full control anymore

  5. Venture math is a harsh mistress 


Key advice: VCs are optimizing for a very specific outcome (making a large as possible profit fast). Share that alignment, or don’t take their money.


Chances to convert a startup into a VC-funded success, are not very high, if you look at the numbers. But worse than that, is what you have to endure and give up to achieve that goal.


Useful. 7/10



Full article: http://modelviewculture.com/pieces/five-reasons-not-to-raise-venture-capital 

Reading time:  7 mins.


See also: http://www.masternewmedia.org/bootstrapping-startups-guide/ 







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Startup Funding: The Fund-Raising Game Has Changed - 7 Ways To Raise Money For Your Business In 2012

Startup Funding: The Fund-Raising Game Has Changed - 7 Ways To Raise Money For Your Business In 2012 | Online Business Models | Scoop.it

From the article intro: "Startup funds will be harder to come by in 2012, according to hundreds of venture capitalists polled in a recent survey by the National Venture Capital Association.


...


In spite of the gloomy funding forecasts, there's still hope for entrepreneurs in need of cash in 2012.


In fact, small-business financing options outside the venture capital industry are rapidly proliferating in the digital age.


With just a few clicks, anyone can pitch a business idea to the growing ranks of angel investors.


In addition, a number of Web services now provide platforms for entrepreneurs to raise small sums of money from large pools of people -- a process known as crowdfunding.


Even Congress is showing deference toward the Internet's capacity to connect businesses with capital, as lawmakers weigh rule-changes that would allow entrepreneurs to use social networks to sell stakes in their startups. (Under current securities law, entrepreneurs can only solicit donations.)


Still, a large share of startup funds continues to flow from the old-fashioned lender that small-business owners love to hate: banks.


...


So regardless of whether you run a tech startup on the hunt for strategic Silicon Valley investors or you own a local restaurant that's in need of nothing more than a simple bank loan, entrepreneurs must recognize that in the new year, the fund-raising game has changed."


Here are the new ways to raise in 2012:

1. Banks

2. Crowdfunding

3. Contest and Accelerator Programs

4. Online Pawn Shops

5. Friends and Family

6. Angel List

7. Revenue-Based Financing


Fibd out more:

http://www.huffingtonpost.com/2011/12/23/startup-funding-7-ways-to-raise-money-in-2012_n_1161801.html#s563590&title=Banks 

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