THE DREAM IN ACTION

Recently Mark Suster discussed the topic of VC seed investing and when it can be a bad thing on his blog, Both Sides of the Table. This reminded me of a conversation I had with another experienced entrepreneur offline who said… “First time entrepreneurs shouldn’t be picky. If someone is offering you venture money it’s your lucky day and you’d be a fool not to take it. Don’t argue the terms first time around, once you’ve had a successful exit, then you can have the upper hand.”

So I reached out to Mark on the topic because I think he’s one of the more forward thinking VC’s out there and got his take. Here’s the interaction below. Thanks Mark.

My question to Mark:

There is a school of thought that a first time entrepreneur who hasn’t yet proven herself should basically take any money they can get. Get your company off the ground with anyone who is willing to take a bet on you and be picky with your second startup effort.
What are you thoughts on this? Maybe you can put on the entrepreneurial side of the table hat for this one?

From Mark:

My view, you always raise the highest quality money you can. If you’re first time and you can’t get the A team but you’re convinced you have a great idea then you look at your lesser options. Only scenario where I wouldn’t take the money is when the terms are so onerous that being successful doesn’t add enough to you as an individual. At that point I tell people to find another idea (or possibly another profession). Thanks for your question.

So, for young entrepreneurs, if you have an opportunity to raise money you probably need to take it. But always weigh the cost. How much are you giving up? Make sure you keep enough of your company that you’re still willing to sell all out (emotionally not, financially) to make it a successful one, you’re going to need that motivation down the very difficult road that you’re now driving.

image via flickr