raising funds or not?

Filed in archive Entrepreneurship on March 16, 2004

Philippe Laferriere has an interesting post on the question on raisiing funds for start-ups. He extendeds on Loic's post a while ago.


Hers is his summary on pro and cons:

"Pros:

• speed up development through available budget for hiring, marketing, international expansion etc..., but manage the cash as if it was your own.



• external investors provide support, advices and ideas, potential partnerships..., but check the relevance to your business.


• brings tremendous market awareness and credibility, but the market will now your company is rich.


• discourage investors to invest in competitors, unless your competitor is better than you.

Cons:

• dilution of founder shares, but better off in a bigger company -- interest of job and financially.


• less freedom and control, but never expect total freedom anyway.


• potential risks with investors/funds agenda,


• time and budget required for raising and closing rounds, cost to get the pros


• time required to "manage" your various investors and complex board, cost to get the pros."