The Benefits of NOT Raising Money

By Venture Capital

Some startup company founders are determined to raise cash from day one. Of course, some startup companies will only experience day one if they raise capital and thus have no choice but to put their best foot forward with investors. Other startup founders rank raising cash somewhere between death and disability on their personal wish-list.

The question of whether or not to raise cash is going to depend on market forces and several factors exclusive to your startup company. But whether you choose to hold off seeking investors permanently or temporarily, there are benefits to not raising money. Wil Schroter of the GoBIGnetwork addresses such benefits in The Monetary Value of Not Taking Capital.

Wil lists avoiding dilution, forcing you to focus, maintaining control, and the ability to refine your company’s vision as benefits of not taking capital from investors.

Unless your startup company has assets to leverage with potential investors, being diluted and losing control will be serious consequences of raising capital. And since most startup companies lack leverage, there’s not much a startup company founder (or the startup company’s lawyer) can do to prevent a large dilution or loss of control.


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