There Are Two VC Industries
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There Are Two VC Industries
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Re: There Are Two VC Industries
#2is it possible to get pg to filter out the utm_source= google/feedburner querystring params on submit? it would filter out a lot of dupes...
Re: There Are Two VC Industries
#3There have been a bunch of articles about VCs being replaced by Angels and Bootstrapping, but really those articles should just be saying that software businesses have matured to the point where VC funding might not be necessary at all.
At what point can I walk into a bank and get a normal business loan for my web app company? I think we're approaching that point.
In my mind you can bootstrap the average web app company, and when you actually acquire some revenue and need capital to grow, get a small business loan. Is the risk in these kind of companies any greater than the average restaurent? I don't think it is. Software has lower capital requirements at first, lower operating expenses, lower overhead, but for some reason the norm is still to trade equity for cash. Forget that, just trade debt for cash like a normal business. I'm not sure banks will go for it yet but I think we're approaching that point when it is possible.
Re: There Are Two VC Industries
#4There have been a bunch of articles about VCs being replaced by Angels and Bootstrapping, but really those articles should just be saying that software businesses have matured to the point where VC funding might not be necessary at all. At what point can I walk into a bank and get a normal business loan for my web app company? I think we're approaching that point. In my mind you can bootstrap the average web app comp…
But if a restaurant goes under, you have all the capital right there (pizza ovens, tables). Software consumes its capital. Banks aren't the answer. If it fails, what are they going to get back? That year of your life?
What we need is crowd-sourced, micro-equity. Anyone who thinks an idea is good to invest small amounts for small stakes of equity. The barriers have been regulatory legal issues, but those will be soon eliminated. OpenStarts is one such initiative working on this.
Re: There Are Two VC Industries
#5There have been a bunch of articles about VCs being replaced by Angels and Bootstrapping, but really those articles should just be saying that software businesses have matured to the point where VC funding might not be necessary at all. At what point can I walk into a bank and get a normal business loan for my web app company? I think we're approaching that point. In my mind you can bootstrap the average web app comp…
But if a restaurant goes under, you have all the capital right there (pizza ovens, tables). Software consumes its capital. Banks aren't the answer. If it fails, what are they going to get back? That year of your life? What we need is crowd-sourced, micro-equity. Anyone who thinks an idea is good to invest small amounts for small stakes of equity. The barriers have been regulatory legal issues, but those will be soon…
But isn't it also true that "crowd-sourced, micro-equity" can easily be understood as, you know, SELL SOMETHING to SOMEONE? No giving up equity and you still get the "funding".
The thing is, that's called bootstrapping and the problem with bootstrapping is that it's just very damn slow. Sure you can do it, but you won't get the anorganic super fast growth you need to compete against the whole world. It works when you're doing stuff locally, now that everybody's shooting for global markets via the internet it can be a dash troublesome no?
Re: There Are Two VC Industries
#6Since the capital requirement is no longer a large barrier to entry for web startups, I am wondering this mean:
- a startup should stay in stealth mode longer in order to give it a bigger legs up on its possible competitors - silicon valley connection to VC money becomes less critical and the team makeup for execution becomes more important. This may mitigate some of the advantages of starting in the valley.
What do you think about the assertion above?
Re: There Are Two VC Industries
#7Since the capital requirement is no longer a large barrier to entry for web startups, I am wondering this mean: - a startup should stay in stealth mode longer in order to give it a bigger legs up on its possible competitors - silicon valley connection to VC money becomes less critical and the team makeup for execution becomes more important. This may mitigate some of the advantages of starting in the valley. What do…
Working on a web startup in Europe the big majority of advice I get is saying "Go to the Valley".
The thing is, in Europe, nobody takes web startups seriously yet. The web is still seen as something that neighbour kid does perfectly well. Why start a company based on that when some kid can do it for a fraction of the price and just as well?
In the Valley, I hear, the attitude is a lot different and if nothing else that means it's a lot easier to get traction.
Re: There Are Two VC Industries
#8Since the capital requirement is no longer a large barrier to entry for web startups, I am wondering this mean: - a startup should stay in stealth mode longer in order to give it a bigger legs up on its possible competitors - silicon valley connection to VC money becomes less critical and the team makeup for execution becomes more important. This may mitigate some of the advantages of starting in the valley. What do…
Working on a web startup in Europe the big majority of advice I get is saying "Go to the Valley". The thing is, in Europe, nobody takes web startups seriously yet. The web is still seen as something that neighbour kid does perfectly well. Why start a company based on that when some kid can do it for a fraction of the price and just as well? In the Valley, I hear, the attitude is a lot different and if nothing else th…
Yes I can see the value of an open attitude towards web startup would help you hire or partner. And if you are trying to solve a technology problem, you also have an easier time to reach your target customer (other techies). But if your web startup is not tech focused (i.e e-commerce, b2c), does the valley really help you any more in getting traction by growing your user base?
Re: There Are Two VC Industries
#9Earlier quoted context omitted.
But if a restaurant goes under, you have all the capital right there (pizza ovens, tables). Software consumes its capital. Banks aren't the answer. If it fails, what are they going to get back? That year of your life? What we need is crowd-sourced, micro-equity. Anyone who thinks an idea is good to invest small amounts for small stakes of equity. The barriers have been regulatory legal issues, but those will be soon…
But isn't it also true that "crowd-sourced, micro-equity" can easily be understood as, you know, SELL SOMETHING to SOMEONE? No giving up equity and you still get the "funding". The thing is, that's called bootstrapping and the problem with bootstrapping is that it's just very damn slow. Sure you can do it, but you won't get the anorganic super fast growth you need to compete against the whole world. It works when you…
But isn't it also true that "crowd-sourced, micro-equity" can easily be understood as [bootstrapping]?
No. I'm talking about something else. Micro-equity means giving up a small amount of equity for a small amount of money. Instead of an angel getting 100,000 shares for 200,000 dollars, you get lots of investments of 50 dollars for 25 shares.
Take a look here: http://www.me-vc.com
Re: There Are Two VC Industries
#10There have been a bunch of articles about VCs being replaced by Angels and Bootstrapping, but really those articles should just be saying that software businesses have matured to the point where VC funding might not be necessary at all. At what point can I walk into a bank and get a normal business loan for my web app company? I think we're approaching that point. In my mind you can bootstrap the average web app comp…
When we started GitHub, I looked into getting a loan from the SBA because we didn't want to go the VC route, but the requirements were off-putting to say the least.
Stuff like "SBA requires the borrower to have invested between 25 to 50 percent of the amount requested." So, you'd have to toss in 5k just so they'd give you 10k-20k and for that kind of money, it didn't seem worth the hassle at all.
Banks won't ever give out tech company loans unless you have the personal collateral to back it, because they can't repossess your code.