Startups Rejecting Venture Capital

You’re really acting like an authority on “public offerings”, do you think you know more than the SEC about public offerings and they don’t know what one is? I understand your definition, it’s just not the legal definition is all.

What’s at odds is Packers “Stock” which isn’t “stock” in the common definition and understanding, but it’s still called stock, it’s just not a security or investment.

Have you even seen the Packers Public Offering Document(s) or subscription agreements? Because I’ve never seen a donation/charity issue “public offering documents” or require subscription agreements.

Edit:

>public offering is selling parts of your company for cash, aka a stock, ownership has it's privileges, without those privileges, you aren't selling anything to the public,

You should also really take a look at SEC enforcement actions against ICOs because almost none of them are “stock” nor carry privileges yet are considered public offerings.

The idea that startups are rejecting venture capital en masse on the basis of interviewing a hodge podge of random startups and micro VC's this journalist seems to be friends with is absurd.

- Costs are low enough I don't need them for much if anything.

- I'm unwilling to accept any form of liquidity preferences. Not under any circumstances. They don't get to further offload risk upon other owners like cowards, they have to ride the same risk train as every other owner. Liquidity preferences and the various types of abuses deployed through them are the greatest scams going in the VC world. In a typical start-up there is no greater way that VCs cheat the other owners.

- I don't believe in vesting the founders in cases where they've built the initial product over time (eg 6-12 months). I found the company, I build the product, I launch the product, the VC gets to ride my train, then they want me to vest my existing ownership. Nope. My shares are already fully vested, it's my company. These days I only allow VCs to pitch me, I never pitch them. If you build something that matters at all, the VCs seek you out anyway. In the US there's a hundred billion dollars in VC money every year desperately looking for ventures, make it beg for your attention.

- VCs are only allowed to have common shares. They ride in the same boat as everyone else. They get no choice in the matter.

- There is a lot more money chasing few decent start-ups. That equation is only going to continue to get worse in the favor of the founders. There are a lot of reasons for this, including the cost of starting up being low, and also the requirement for the Fed to keep interest rates permanently low so the US Government doesn't collapse (that will perpetually keep money sloshing around the system looking for returns, feeding bubbles, etc). Just ~4% on a soon-to-be $30 trillion in public debt would collapse the US Government, they can never allow that, which tells you how they're going to be forced to behave over time. There will be periods of ups and downs to this, however it's going to be higher ups and higher lows for loose capital over the near term, due to the Fed flooding the system with liquidity (at least for the next few decades, who knows beyond that).

These terms are non-negotiable. The VCs can take a hike if they don't like it. For practical purposes there's an unlimited supply of other capital and other VCs, especially if you have something good at all.

This is how all start-ups should deal with venture capitalists for the next 20 years or so, until something breaks with how the Fed is going to be forced to finance the US Govt with perma low rates. Capital is in a begging position during that time, use that fact to your advantage.