Is Startup Funding the Holy Grail or a Curse?

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I think entrepreneurs should initially spend time raising revenue instead of funds, and
only seek additional outside capital when absolutely necessary. Then when it becomes necessary
to look for outside capital, entrepreneurs should try to find funding from an investor that also adds
credibility and expertise to the company.

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Is Startup Funding the Holy Grail or a Curse?

  1. 1. http://biztaxbuzz.com/is-startup-funding-the-holy-grail-or-a-curse/ May 21, 2013Is Startup Funding the Holy Grail or a Curse? | BizTaxBuzzby Trevor Crow5thAprilIs Startup Funding the Holy Grail or aCurse?Posted by Trevor CrowI speak to many startup entrepreneurs and almost all of them spend a lot of time strategizing thebest way to get a big round of financing from angels or VCs. Entrepreneurs need to understandthat raising money can be a double-edged sword. On one side, the outside investment can providemuch needed credibility, guidance, visibility and oh yeah …. capital. On the other side, the companyis giving up a chunk of ownership and control of the company.Most outside investors who write you a big check will also take an active role in the company toprotect their investment. This can either be a benefit or a detriment to the founders of thecompany because the effectiveness of the relationship and the quality of guidance varies widelyamongst potential outside investors.Bottom Line. I think entrepreneurs should initially spend time raising revenue instead of funds, andonly seek additional outside capital when absolutely necessary. Then when it becomes necessaryto look for outside capital, entrepreneurs should try to find funding from an investor that also addscredibility and expertise to the company.

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