Don't Take VC Funding – It Will Destroy Your Company

The article has a lot of interesting points, but seems to miss out on one of the main reasons (IMO) that startups take funding, which is to grow faster than (or as fast as) their competition.

Unless you're lucky enough to be in a market segment without competition, you need to keep an eye on what your competitors are up to. If they can expand faster, add features faster and get more customers than you, it damages your chance of success in that market segment.

Taking VC money could provide that velosity.

That said ofc I do agree that, if your goal is to run a profitable business for a long time, taking VC cash is quite possibly a bad idea, depends on what the founders goals are.

I self-funded my startup to the tune of half a million dollars.

I've had what I can only assume to be a VC-funded competitor study my endpoints for high latency / expensive queries, then saturate them with millions of requests a second across thousands of simultaneous IP addresses.

Business is survival of the fittest. Pressures and growth gradients come in all shapes and sizes.

For every example there is the counter example. It's sort of hard for me to take this advice seriously without the author actually having had raised money. I couldn't tell from skimming it but it feels like it's a lot of common things we know are written by someone who was either rejected by VCs or has a real aversion to it. Look venture capital serves a purpose and that purpose is to accelerate and grow innovative technologies that would otherwise not be capable of doing it another way. Part of that assumption is there will be a way to "capitalize" on that investment and it will go on to be incredibly valuable for end users, businesses or an acquirer. The most important technologies of our lives and the foundations for most things we use were venture funded, that's a fact.

I've worked at bootstrapped companies, I've worked at VC funded companies. I've seen exits and I've seen deaths. I've done the solo founder thing, raised money, blah blah. What I'll tell you is, raise money if you believe there is no other way for you to achieve the goal of turning your vision into a reality without it. Seek out the expertise, the past experience, the people who will be most helpful to you. If they happen to be in venture, then there you go, but if there's a different path, take it. If you have any sort of incentive misalignment with your investors, yes it's going to destroy your company, but even more so it's going to ruin your life, your relationships, the joy you had in the thing you were building. You can either see VC funding as a game and the hot shiny thing to chase that will solve all your problems or you can be truly realistic about it and understand that it's a tool like any other to build and manifest into reality a product and vision you have for something you believe should exist.

Today due to the saturation of accelerators, venture and the abundance of capital it's basically just a lifestyle thing that you raise a round and hack on side projects like it's a job but there's also the self selecting group within there who take it really seriously. So you know when I bootstrapped for 4 years solo, raised funding and tried to build a product/team/company through COVID it was a brutal experience but one I took seriously and tried really hard not just to manifest my vision into reality but also take care of the people on that journey, be forthright with my investors, etc. It's hard man, only do it if you really get that.

Oh. Hi Matthew!

I think it falls into a few categories: and you can _feel_ the difference. There is type one: the company just going through the motions because they're just the NPC that feels "oh I now its time to 'do' VC because that's what everyone does"

Then another type: some of the deep tech startups full of super smart people, even publishing papers, and are usually backed by one or more major institutions (universities, companies, etc.) you can literally feel the passion pouring out of their employees

Then even still there is a third but very rare type: that startup that bootstrapped itself to profitability without any VC at all! (IMO most impressive and difficult)