Saturday, February 3, 2007


What will we do when it comes to funding? For starters, a web-based business doesn't take all that much capital. It's my belief that startups should shy away from VC money as long as possible. If needed, fund internally through friends and family. If you still need more capital, get in touch with some angel investors. As a last resort, head for the VC's.

I think VC's introduce a level of unneeded complexity, especially at the seed stage level. Not only do you have to meet expectations, but you also give up a lot of control - your "solution" is no longer your solution... It's a solution determined to be satisfiable by the VC's.

This opinion is largely shared with the founders of 37Signals. Don't take funding unless you need it. In the "web 2.0" world, I see many companies doing just that. I may be alone on this, but I don't think an unproven blog widget requires $5 million in VC funding after the first week of operation.

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