Inspired to NOT take any VC money?

,

“Our outfit Envato was started by myself, my big brother, my wife and my best friend,” says Collis Ta’eed (pictured below on the cover of Nett magazine). “We put in a bit of money we each had and mostly just worked hard.” In this Q&A, Ta’eed answers questions about Envato and its path to success.

My wife and I saw “The Social Network” this week, and interesting conversations followed around holding a vision for your start up company, and the role of venture capital in building a business. For some inspiration and a story on becoming successful without VC funding, read this 37 Signals post 🙂

  • Planck

    VC is only appropriate if you have technology that can go global and lots of people will buy it. They can’t invest in niche businesses. They won’t get the pay off they need. Their model of losing on most and winning on one or two means they can only pick businesses with that kind of potential.

    Also, every round of money you take means founders lose % of ownership and control. Eventually, the VCs throw the founders out and replace them with CEO and leadership teams who have done it all before.

    VC is an outdated mode from the industrial era when we needed large global organizations and sales forces to hit max market potential. And their capital was the only way to get that. Lots of bad stuff comes with them.

    Those factors just don’t hold as true today for many business categories. Today small teams can be immensely profitable, and don’t need money to build global organizations.

    In fact, without all the corporate overheads and debt services, etc. in large corporate media today, most journalism organizations would be making adequate money today from their Internet revenues alone. It is the guys in suits having to be paid and given jets and club memberships for their egos that is going out the window!