The Venture Capital Relationship

Filed in archive Venture Capital on May 29, 2010

© e Mill

If your idea of venture capital funding includes anything like a loan application, your idea of VC funding is based on a misconception. In the words of Nat Goldhaber, Venture Capital funding is more like a relationship than a transaction. And the paperwork? That's more like a dating profile you're building than a loan application.

That cuts both ways. As Nat points out, when you take venture capital money you may as well think of it as marrying your investor. Like marriage, you are entering into a long term partnership. It may not be completely permanent, but it's as close as it gets in the business world.

Would you want your daughter to marry the first guy that came along, just because he'd be willing to have her? It's easy to think of VC companies as rich old men and startups as desperate women. That doesn't make for much of a marriage. Think about that...