
Bootstrap Your Startup to Success Without Venture Capital - naish
http://www.theinstitute.ieee.org/portal/site/tionline/menuitem.130a3558587d56e8fb2275875bac26c8/index.jsp?&pName=institute_level1_article&TheCat=2201&article=tionline/legacy/inst2010/nov10/featurecareer.xml&
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tptacek
A 32% failure rate among venture-funded enterprises sounds _wildly_ low. I'm
guessing his data is biased; for instance, he may be over-weighting companies
that receive multiple rounds of funding. His data may also count any
acquisition as "success"; in fact, most acquisitions aren't (many don't even
return investor capital) --- boards often manage to structure wind-downs as
buyouts for the sake of image.

I'd be shocked to learn that that failure rate for A-round -funded companies
was lower than 60%, where "failure" means "liquidity event that does not beat
break-even for investors".

Having been founded and been involved with multiple VC-funded companies: to my
mind, the worst thing about VC is that it delays the inevitable. If you can't
sell the minimum viable product, you won't sell the 1.0 release. If your
minimum viable product requires VC, it isn't minimal. All VC does then is rob
you of 1-2 of the most productive years of your life. It creates an illusory
high-stakes effort with no payout. It hides the "hustle" part of
entrepreneurship (or, worse, outsources it to hired-gun m-teams); if you have
hustle, you can get to 1.0 without VC, and if you don't, you fail anyways.

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jdp23
only six of the 28 $100M companies he interviewed took venture capital. also
interesting: "of the 28 entrepreneurs, Rao found that 64 percent had sales
experience. They also had accounting and financial management skills, as well
as an understanding of the value of their products, which led to higher
profits."

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akamaka
My instincts agree with his basic point, and there is probably much to learn
from the individual companies he has studied.

However, the numbers are _totally_ useless. He has only profiled companies
from Minnesota, and many of them are over 40 years old. His data may just as
well be pointing to differences in availability of venture capital over space
and time.

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jkin
I'm new to startup but I have been to some meetups and breakfasts. Few things
I heard, 1\. don't take VC money 2\. raise VC money when you don't need it 3\.
if you really need the money by ... or else ..., then you should quit and get
a real job

