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Having been both an investor and entrepreneur, I agree with the key message of your post. People who want to do start-ups, but only with others' money, are not the right bets at all. People who have put in all they have and looking for additional support are usually good bets because you can be assured of their core motivation to succeed and salvage themselves.


Point well made,

I feel in most cases entrepreneurs seek funding too early and should get their startup as far as possible with what they have. I feel this also teaches them to be careful with how they spend and makes them more creative in marketing their company. These are improtant traits to learn early on.

Chris Duesing

I agree that until someone can find funding or revenue they will likely need to bootstrap, but your message is wildly irresponsible and potentially damaging to a would be entrepreneur. Much like parents who think their child is the smartest person ever born and deserves nothing but wild success, an entrepreneur is the worst judge of the merits of their own company. Their willingness to go in to bankruptcy for their endeavor is unlikely to be any indicator of success at all on which an investor should rely.

"The best answer you can receive from an entrepreneur is - 'Yes. But I want you to know that I have already put all of my assets into the company and have nothing left.' This is the entrepreneur that will do whatever it takes."

You are encouraging people who have an emotional, rather than rational, view of their company to sink their life savings and put their assets up as collateral.

How about this alternative: Entrepreneurs bootstrap their startup and have a reasonable timeframe in which to raise money or become profitable. If they don't reach this goal they give up, rather than doubling down and securing a loan with their house. It can be the VC's or the public's job to decide if the business is worth putting money in to.

Aron Schoenfeld

Couldn't agree more. I took out personal loans to fund my company and worked 9-5 to make sure I could pay the bills while I worked all night on my first startup. I then had the attitude that I could not let it fail. I have also seen others try and raise capital to protect their assets and play with other people's money. At least half of those people gave up when the going got tough. As I tell everyone, people are investing in you as much as the company. If you show that you are all in, they are more likely to go in with you.

mba india

I was looking for such post.I would like to read more about this topic.

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