It’s rare that you’ll see me post an article from another website on this blog. But I read this and thought it was important. It’s also a topic I don’t know very much about. Small business venture capital. This is being reprinted with permission from Peter Ireland.
With my first business, HydroSport, I worked at least 2 jobs for about 10 years to fund it. If I had known then how much time and money it would take I don’t think I would have done it. It would have been way too overwhelming. But once I was about half way into it there was really no turning back. You get to a certain point where you just have too much time and money invested to give up.
Throughout the whole process I kept wishing a guardian angel investor would come along and save me. But that never happened. Now after reading this article by Peter Ireland, maybe I was on the right path after all and didn’t know it.
Small business venture capital
Are you really sure that you want to go this route? Most entrepreneurs who pursue small business venture capital don’t qualify. They merely end up wasting a lot of time and energy in a futile endeavor.
It gets worse, a venture capital firm will in most cases fire the founder and founding team within months of an early financing round. The Wall Street Journal pointed this out in a article by Barnaby Federer from September 30th, 2002:
them after a few drinks, they’ll say, ‘We replace the CEO’ “,
he said. And that, he indicated, does not vary
with the economic climate.