Need capital to start or build your business? Ever try to figure out who the best fit VC is for you? In my view, the absolute best way for you to get the capital to build your business is to get your capital from your customers in the form of gross profits.
VC Money is Expensive
VC money is dilutive, meaning that if you take their money, you will own less of your company and you have an investor with rights that reduce your control over your business. The only way for VC money to add value to your business is if you use the money in a way that builds more value in your business than the dilutive effects of the VC money. It is true that the value of your business will be higher when you first take the money, as your business will have both its enterprise value plus the cash that is sitting on the balance sheet, but let’s face it — you will spend the cash building your business and you need to turn the cash into business value that is a lot greater than the cash in order for your VC money to add value to your business!
To read the full, original article click on this link: The #1 VC in the World: Customers
