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Saturday
Jun092007

Marc Andreesen with a simple lucid explanation...

This is an explanation (part 1 of 2) of why and who should seek VC for their new business. From what I know of the way the world is and works, I generally agree with his article. Heres a bit from the this post in blog.pmarca.com:

"[snip...] Startups that have a credible potential to be sold or go public for a 10x gain on invested capital within 4 to 6 years of the date of funding should consider raising Venture Capital.Most other startups should not raise venture capital. This includes: startups where the founders want to stay private and independent for a long time; startups where there's no inherent leverage in the business model that could result in a 10x gain in 4 to 6 years; and startups working on projects with a longer fuse than 4 to 6 years. Notably, there are many fine businesses in the world -- many of them highly profitable, and very satisfying to run -- that do not have leverage in their model that makes them suitable for venture capital investment.[...snip]"

(from: The truth about venture capitalists, Part 1)



 

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