Should You Use Venture Capital: Which America Are You In?
In my two previous blogs, I noted that 99.95 percent of you will not get venture capital, and that 99.997 percent of you may want to refuse VC, even if offered. Are these results universal or are there other factors that affect venture success?
One of the most enduring and influential beliefs of the last few decades has been that entrepreneurs need venture capital to build giant companies. This might be true – but only in Silicon Valley.
Silicon Valley has been the land of milk, honey, and money for entrepreneurs and venture capitalists. Arguably Silicon Valley VCs have helped to build perhaps the greatest assemblage of giant, non-financial companies the world has seen. Starting from around the early 1970s, using all types of venture-capital funding arrangements (rich individuals, family funds, small business investment companies, and VC limited partnerships), they have amassed a string of successes ranging from Intel INTC -1.42% to Facebook FB +2.76%.
Posted in Finance, Opinion, Venture Capita;, Venture Capital
Tagged Entrepreneur, finance, Intel, Limited partnership, Silicon Valley, Small Business Administration, Venture Capital, Victoria Cross
Why 99.95% Of Entrepreneurs Should Stop Wasting Time Seeking Venture Capital
It is difficult to pick up a major business publication today without reading about venture capitalists (VCs, defined as professionally-managed VC limited partnerships that invest in early-stage ventures), about their skills in finding great investment opportunities, and about the ventures they fund. And lately in states like Minnesota, it is also about how they can create jobs if the governor would speak favorably about the need for VC and offer some state pension money for them to invest. And since we all like to talk about our successes, the stories are about how entrepreneurs secured VC and soared to wealth in a very short time via an IPO or a strategic sale. This can lead other entrepreneurs to think that this is the only model for success, that there is no other way to build a major company, and that they should write business plans, attend VC conferences, seek VC, and give VCs control of their venture.
Posted in Finance, Opinion, Research, Venture Capita;, Venture Capital
Tagged Business, Entrepreneur, Financial Services, Initial public offering, investment, Minnesota, Venture Capital, Victoria Cross