VC Funding & Risks

March 19, 2019 0

For a startup its catchy to say that we have secured Venture Capital or VC Funding and it really is a lot of hard work to do. If your market is big enough to generate ten-fold increase in investment within a decade then you are good for Venture Capital or VC Funding. But here are few reasons which will make you think twice when you think about VC Funding.

1. Control of your company
Taking VC Funding is same like having business partners to take control of your company. They buy equity in your brand which makes them eligible to say on how you operate. Investors with deep experience in the same industry will come up with their own opinions. But If you’re looking to bring on a partner and money, VC Funding might be the right fit.

2. Accepting Funds when you don’t need
VC Funding comes with many strings and if you don’t really need the money, never take it. The VC firm will interfere in the money you spend, pressure on to move into different business directions or even disagree with you which points towards business shutdowns.

3. Vague vision
A venture capitalist is to generate more revenue but it often defies owners vision or agendas. Company growth can be very faster making you feel you are still not ready for it and team expansion, team, product lines will be lot before you are ready to.

If your business can rely on customer and profits stay away from VC Funding. Acquire a loan for funds to scale your business later on, but bear in mind VC Funding can boost and grow your company rapidly.