The Boss of You

There’s a certain glamour about the phrase “venture capital.” It sounds seductive, powerful, a little mysterious. The very concept of it plays into the myth of the high-stakes entrepreneur — she who risks everything on a dream.

In our industry, we’ve seen some interesting venture-capital stories materialize, and in general I’m pretty skeptical about the benefits of going the VC route, particularly in service-based businesses. Because if your work is fee-for-service, then there’s a limit to the economies of scale you can generate with a cash infusion. (Manufacturing is a whole other ball of wax.)

So I was delighted to come across this post at Udi’s Spot, called “Why I Don’t Want Funding”. Here’s a quick excerpt; Udi is reporting on a talk he attended that was given by a venture capitalist.

[T]he really fascinating part was the end of his talk when he discussed the possible exit strategies for a successful company. There were two options. First was an acquisition. Second was an IPO. That’s it. Two options. Nothing else.

Conspicuously missing from this list was the idea that you might, *gasp*, form a profitable, self-sustaining business.

Yep, I’ve encountered versions of that same guy in all kinds of places, from cocktail parties to business meet-and-greets. And I generally react by excusing myself to refill my drink. It’s great to see others are refuting that “wisdom”, too.

(Thanks to Powazek.com for pointing to Udi’s great post.)