| As someone who is running a business whose main occupation is to help the government give money to tech companies and startups, I actually disagree with this. I think most startups don't need money (and they typically don't get any, because most government funding is match funding, and so you have to spend to get, and very early startups don't spend anything). Or rather, they need money, but probably not from investors, and certainly not from the government. They need money from customers. My thoughts on why money is toxic to most entrepreneurs are pretty well summarised in this article: http://swombat.com/2011/12/8/investment-cushion-springboard Growing companies that have figured out how to make their own money already do need money, but the reason they can make good use of it is also the reason why they don't need it as much as the cash-starved early startups. To a functioning company, money is lifeblood, and more money can help make the company a bigger success than it already is (or make it more competitive against other companies in the same space). To an early startup, money is a toxic sludge that will slow it down, cause weird and unpredictable mutations, and possibly kill it when it might have lived. Disclaimer: I'm talking about startups operating outside of the Magical Land of Silicon Bubbles, who have to actually create a viable business rather than just build something popular that makes no money and then sell it for a billion dollars. |
I'm thinking of the bootstrapper scenario, where the founders don't have the kind of cash reserves just lying around, to enable them to quit and work on the startup fulltime right away. So they're forced to keep dayjobs and work on the project nights and weekends. Now, you can get a lot done, especially from a product standpoint, working nights and weekends. But when you need to go out and meet people (potential customers, partners, distributors, investors, whatever)... well, those people usually expect to do business during "business hours". If you have a potential customer on the table, but you can't meet with them because you're at work at your 9-5 all day, or because you can't afford to fly to $EAST_BUMFUCK, or whatever, it really puts a crimp in things.
Of course, I'm not saying it can't be done... In fact, I'm in the middle of doing this myself, and we find workarounds: I meet people over lunch, or come in early and leave early at the $DAYJOB so I can meet early afternoon (or flip it around for a breakfast meeting), and I use Skype, chat, etc. to do remote meetings. And we solve the travel expense problem by focusing on customers who are geographically close to us. And for us, the advantages of bootstrapping justify doing this for now. But I can see where many startups would really need - at a bare minimum - enough money for the founders to be able to work on the project fulltime, and maybe some money to cover incidental expenses from going through Customer Development.