Raising Venture Capital These Days
from the helps-to-have-done-it-before dept
The Washington Post is running a story where they followed around an entrepreneur to see just how difficult it is to raise money for a brand new startup these days. Turns out, based on this article, it's not difficult at all. All you need to do is have built a successful startup before which you sold off for millions of dollars making the same investors who invested in you last time, willing to dump their latest cash into whatever you come up with this time. Nothing to it. I'm surprised everyone doesn't do it that way. Honestly, I think this is a terrible article. I think it's a useless example of what it's really like to raise money, since they don't show him actually being tested at all. If you want to actually try to raise money from a venture capitalist (especially in today's market) don't expect it to be anything like what's described in that article.
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I do know
I've been working with VCs for quite a while, all during the current downturn. And I can tell you, that each VC has their own particular excuse about why a company isn't worth investing in -- usually because they can't come in, pick up broken pieces and turn them around for a quick return, which really is today's M.O.
The situation is the way it has always been: it's who you know. That is the path to funding. That's what the article suggests, and it's basically the truth.
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Re: I do know
I've been hearing stories about people who have been very successful, and who have great ideas, and who know plenty of VCs getting turned down or getting pushed off for months on end. I think the article is quite misleading.
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Mile Wide, Inch Deep
That said, if you're looking to the Post business section for your dose of real world, slice of life journalism - you're probably looking in the wrong spot.
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