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Monday 2 February 2015

About VC Money and Startups

Having been in the VC/Private Equity business for three decades now I am often asked if VC money can make a startup successful on its own and if not what really does it.

So I thought I’d share with you in here my 2 cents in the hope of further educating entrepreneurs as to the process.

First off, let me state that VC money is a first step but it is never enough on its own. Judging from how most VCs and angels fund more losers than winners, there are plenty of examples that will attest to that.

Now if you want to go to the root of it I really believe it all depends on the type of business you are in.

1. In Consumer Internet entities, it lets you defer revenues, and thus maximize users and go for the viral effect. This for example worked quite well for Facebook, Google, Instagram, Twitter, Tumblr, etc…. Basically, if you can defer revenues and thereby become a Top 100-200 website, then the result is outstanding…. But if VC money can’t get you to be a Top 400 website — then forget about it altogether.

For More: About VC Money and Startups

Thank You,

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