The Valley is a Harsh Mistress http://www.warplife.com/tips/business/stock/venture/capital/misery.html http://www.warplife.com/tips/business/stock/venture/capi

The Valley is a Harsh Mistress http://www.warplife.com/tips/business/stock/venture/capital/misery.html http://www.warplife.com/tips/business/stock/venture/capital/... My Live Picture stock certificate sure looks nice. I dont really know but would be unsurprised were someone to tell me I was the only one to exercise our options. It's not just startups, most businesses of any sort fail in their first five years. While there are advantages to funding there are disadvantages too. Even if you don't blow your VC on aeron chairs and craft beer you must sell a product or service that, while perhaps not profitable at least conceivably could be, and ship it so that it achieves convincing market penetration by the time you burn rate has burned the round you are presently burning. Most arguments for self funding focus on the dilution of equity that comes with investment but there are many other arguments. Another is that if you fund your project yourself you don't have to answer to anyone. Whether that is a good thing depends on your own judgement; don't self fund a product that does no one any good. Every last one of us has the capacity to create a product that could could earn us a tidy living, maybe pay a few employees. At that point we face a choice: improve that one offering, or use some of the cash to fund something completely unrelated? There are many good arguments for each of the two choices. Ball Metal Container makes every pop can in America. Nokia at first made rubber boots while the predecessor to IBM made bacon slicing machines. I grant that there is appeal to working for a startup: it's nice to be noticed. I contributed to some products that were huge hits at trade shows. I would make my Mama proud were I to make front page at the Wall Street Journal. By contrast self-funders often labor in obscurity, sometimes poverty for years. Even so, many succeed, often spectacularly so, as did the father and son who invented Flow Hive, and improved way to harvest bee honey. Their is some possibility that Flow Hive all by itself will reverse colony collapse disorder, in that it makes beekeeping far more accessible to the nonspecialist. In my own estimation venture backed startups are no more likely to be in business ten years later than the sole proprietorship.