When You Don't Need a Venture Capitalist

Betsy: Now, you know a lot of VC’s get a bad rap or sometimes that has happened, where…

David: ...No! Say it ain’t so…

Betsy: I mean that you bring a lot more than money, but for people who you know, what do you say when people say you know “they are a pain” or “you should never raise money from VC’s.” What kinds of things do you?

David: Well, first of all, if you don’t need to raise money from a VC, in most instances, you shouldn’t. Right? I mean I do think that there are lots of things I can be helpful with. I can help you raise more money in the future where if you don’t need to raise more money in the future, then it is not that valuable to you. I can help you recruit members of your team, but if you don’t need to recruit more members of your team, then that’s not...you know. So, I don’t think that all businesses should raise venture capital. I don’t think that all entrepreneurs should raise venture capital. I think that there are a set of businesses that are high growth businesses that are quite risky that where there is a big opportunity and venture capital is a great fit for that. And maybe that is that you have to invest a lot of money in developing your product. And then at the end of it you will have a product you can hopefully sell. Maybe it is that you have a lot of people on your website that are really excited about what you are doing and you are basically getting crushed. You don’t own enough computers. You don’t have enough bandwidth and your service which everybody loves is now absolutely falling apart. These are great opportunities to come in and take venture capital and work side by side with a VC to build a business. To make it something bigger and more interesting. But, if you don’t think those are things that you need sort of the help of the capital to make your idea come to fruition, or you are not interested in involving someone else in the thinking about your products and your strategy and all that, then you are not a great candidate for venture capital and that’s fine. I don’t have any sense that I will go out of business if a group of people decide that they don’t want venture capital because they are not great candidates for venture capital. There are plenty of entrepreneurs who are looking for money and you know as long as I have money to invest in those entrepreneurs then everything will be fine.