You shouldn’t regret raising from VCs. After all, no one forces you to raise venture capital. In most scenarios.
Perhaps you should regret who you raised from, though.
Why no regrets in general?
Well, there are I think 2 basic rules for founders and VC capital:
- Raise it if you need it to get going. If you need it, no regrets. In my first 2 start-ups, I needed venture capital to get off the ground. Yes, there were conditions and dilution. But it didn’t matter. It was the only way to make it happen. It was binary. Required. So there should be no regrets here. I’d never have made a nickel or built either of my first 2 start-ups without VC capital.
- Raise if it’s cheap and low drama. If you don’t need more money, but the price is good, your burn is low, and the drama is low … you won’t have any regrets. If you raise from strength AND you don’t ever need to raise again … drama is low. So there should be no regrets here, either.
These two scenarios don’t produce regrets.
Most regrets are in the scenarios things where (x) don’t go well and (y) you need more venture capital to survive. When the start-up fails, misses a year, misses the plan hard, and/or sells for less or not much more than it raised.
These are all tough scenarios. But they go much better when you have a VC that truly believes in you. VCs that truly believe in the founders make this tough situations no more tough than they have to be. And often, at the margin, the founders do much better in tough situations with VCs that believe in them.
So if you have options, if you have choices … don’t pick the VC with the fanciest brand, the latest IPO, the hottest hand, the top company she founded. Yes, those are nice. But pick the one you can trust the most. Everything else comes second.
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