Welcome back reader! As you probably know by now, I’m a member of ENET the Boston Entrepreneurs Network. It’s a great association of entrepreneurs where opportunity comes to life. If you live in MA you should seriously consider joining. I’ve found the information over the past year to be invaluable.
This past week’s event was around the topic of Funding a Company Without an Angel or VC. There are countless examples of successes that weren’t funded those ways, and often companies are better off delaying inorganic growth. Angels and VCs want something (a ROI on the $) and aren’t company saviors looking to burn money. Friends and family can often provide a lot of the financing needed to start a company on a budget. Bootstrapping is another way to grow a companies without risking dilution from investors or bankruptcy from loans. Often an investor wants to see cash flow and growth over time, and without those, the investor really holds the cards because they’ve heard “it’s a great idea it’ll work” a million times.
That being said, VCs and angels serve a great purpose in investing in small businesses that will grow the economy. The important thing to do is weigh all the options and get multiple opinions on growth strategies to protect yourself. Sometimes delaying growth can be deadly, but so can uncontrolled growth.