Is VC funding part of your business strategy? If so, you might want to rethink that move. From the moment you accept the money you’re all but guaranteeing that you will be fired from your own company.
In fact, “founders who got fired and bounced back” has become a very popular story. It’s the story we want to hear: people who failed, fell flat on their face, and went on to do things that are even bigger and better than those things they left behind.
Some people do not bounce back, however.
These 3 Founders Demonstrate Why Seeking VC Funding is a Terrible Idea
1. Founder Andrew Mason of Groupon
Mason was fired after just four and a half years with his company. His new career as a producer of “motivational business music” is probably not going to make him his next million.
Groupon received $950 million in VC funding.
2. Founder Noah Glass of Twitter
Glass may be up to something big, but if he is, nobody knows about it. He certainly hasn’t launched another company since his ouster in 2006.
Twitter raised $15 million in VC funds in 2008.
3. Founder Martin Eberhard of Tesla Motors
Eberhard was ousted in 2007. There’s no evidence that he’ll ever return as the CEO of another company. Instead, he’s doing some “unspecified” work for Volkswagon. He may be an employee. He may be a consultant. But he’s not a business owner. Not anymore.
Tesla raised $105 million in VC funds.
You are probably not the exception to this rule.
You may think that you’re going to dodge this bullet somehow. However, the odds are against you. Most founders get fired after seeking VC funding. In fact, many VCs start trying to figure out how to get rid of founders nearly as soon as they invest in the company. Sometimes ousted founders continue to work at the company—but as consultants or as employees. This is probably not what most business owners had in mind on the day the business launched.
Good news—this doesn’t have to be your fate. You can back away from the glitz and glamor of million dollar payouts. Instead, you can focus on growing your business naturally: by making sales, and by allowing those sales to pay for your growth. It’s not as glamorous. There are a lot of sleepless nights. But you’ll thank yourself when you get to keep everything that you’ve worked so hard to create.
This article was syndicated from Business 2 Community: These 3 Founders Demonstrate Why Seeking VC Funding is a Terrible Idea
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