In the startup world, there are some prevailing assumptions about venture capital and building companies. But just because those assumptions are prevailing doesn’t mean they’re correct. That’s why I always like resources that help demystify the world of venture capital and its impact on companies. Like Venture Deals by Brad Feld and Jason Mendelson.
And while a VC’s perspective can be hugely valuable, what about the vantage from the other side of the table…? Like a founder who has raised significant capital.
This is the first post in a series I’ll be writing on the structural problems in venture capital. These problems aren’t a condemnation of the industry, they’re an attempt to outline where the industry fails the market. This failure helps to explain people’s experiences, but I think also helps to outline the opportunity and need for other ways of funding companies. These ways will also have flaws — they’ll likely not be great at building unicorns — but they’ll be finding people and markets ignored by the current environment.
And here’s the first taste in a post entitled “If You Take Venture Capital, You’re Forcing Your Company To Exit.” Which takes your through the motivations of a VC — and the pressures they face.
If our industry could develop a funding model that was as compelling to founders as is the current venture capital model, the dysfunctions that we’re experiencing would be reduced as businesses naturally gravitated to whichever fit them best.
Fundamentally, venture capital isn’t causing the dysfunction in the markets; the lack of alternatives to venture capital is.
For more, stay tuned to Understanding Venture Capital.