Note that I said "lifestyle business", not "startup." I can't think of anything outweighing the downside of losing the ability to have my business as an extension of my own life, perfectly meshing into my own desires. If I had fuck-you money[1], all I'd do with it is... start this business.
I hope to still be running it in 40 years--and imagining someone having the power to force me to do something I don't want to do with my own company, even after I've put in 40 years of effort into it... well. This is why I would recommend just taking on loans/debt first: when your company grows, you'll pay off debts (and when your company fails bankruptcy/liquidation will still make them go away), but equity is a loan that gets harder and harder to pay out the bigger your company gets.
Of course, this is all assuming you're taking investment from someone whose utility function doesn't match your own (usually in that you care more about the business, and they care more about the money.) I would gladly put in with some people--but those are cofounders, not investors.
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[1] But really, I don't think I need fuck-you money--I've planned the business in stages (pre-set pivots), where each stage targets a market of appropriate size and entrenchment to fund the next stage (tackle B2B when small, B2C when huge, basically.) In effect, I'm just planning to be my own investor. :)
That's fine. Please keep in mind though that investors are only one of a group of many people that you have to bogu for ("bend over, grease up"). There are also customers (major and minor), employees, partners (if any) landlords, spouses, kids etc. Agree that not having investors is certainly one less to deal with though.
Even on the issues of "customers" that can be granular. Do you have a bunch of small customers who don't know about each other? Or a bunch of small customers that do know about each other (and can create a problem for you if you don't beat to their drum?). Do you have the type of business (not you but anyone reading this) that has a concentration of business with 3 large customers and if any of them left you'd have a big problem? Do you have someone who owes you money, won't pay (a big sum of money) and you have sleepless nights?
"and when your company fails bankruptcy/liquidation will still make them go away"
I come from a time and place where failure like that was viewed differently. It would not be as easy for me to do that and not have it bother me. That said it's not a bad mindset if it doesn't have the same impact on you (you're lucky it's really hard to un-ring that bell).
I hope to still be running it in 40 years--and imagining someone having the power to force me to do something I don't want to do with my own company, even after I've put in 40 years of effort into it... well. This is why I would recommend just taking on loans/debt first: when your company grows, you'll pay off debts (and when your company fails bankruptcy/liquidation will still make them go away), but equity is a loan that gets harder and harder to pay out the bigger your company gets.
Of course, this is all assuming you're taking investment from someone whose utility function doesn't match your own (usually in that you care more about the business, and they care more about the money.) I would gladly put in with some people--but those are cofounders, not investors.
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[1] But really, I don't think I need fuck-you money--I've planned the business in stages (pre-set pivots), where each stage targets a market of appropriate size and entrenchment to fund the next stage (tackle B2B when small, B2C when huge, basically.) In effect, I'm just planning to be my own investor. :)