

Does "The Equity Equation" apply to VC's as well? - wensing

Grappling with the formula for deciding whether to take investment or to stay bootstrapped.  Assume you're ramen profitable.  Any insight would be appreciated.
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pg
It would apply to any deal in which you trade equity for something, but VC
deals are usually not straight swaps of cash for equity. E.g. they usually get
liquidation preferences and the ability to veto small exits, both of which
might decrease your expected value by truncating the curve of outcomes.

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wensing
Thank you.

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_delirium
That particular decision seems to involve enough incomparable quantities that
I'd focus on those rather than the actual valuation equation. Taking VC versus
not taking VC puts you on different enough trajectories that it seems worth
looking at your preferences there, first. For example, two extreme points: 1)
the scale-up-fast, exit-within-a-few-years VC-backed shot; and 2) the
"lifestyle business", growing to sustained revenues that are enough to make
the founders a nice income indefinitely, with no intention of selling.

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wensing
In case you don't remember, here's "The Equity Equation":
<http://paulgraham.com/equity.html>

