>From what I've seen so far in my travels and from my experiences, I would definitely for a first time founder favour bootstrapping until you get market fit for your services/products and then if you're lucky, use your organically generated funds to scale, or at this stage take on some angel funding to scale up to becoming at least a self sufficient company.
I've seen a number of start-ups get a large amount of upfront funding that basically just keeps them going down the wrong product/service development path for longer, burning cash and making no progress. I think VC funding is a tool to aggressively grow far faster than you could ever grow by organic growth alone, and I wouldn't think many organisations in Australia would really need true VC funding. From what I've read, many VC investor groups invest in a large number of startups expecting the majority to fail or break even and making a killing on a small number of companies in their portfolio making it more of a numbers game which Australia just doesn't have the scale to support at this stage. I've only spoken to one VC firm at this stage, but the key value I thought they brought to the table was with corporate infrastructure/knowledge i.e. acquiring other firms/getting acquired, networks, board and exec structuring or IPO's etc... so they are kind of acting like a professional services firm but with skin in the game and more domain specific knowledge. On Sun, Sep 26, 2010 at 9:46 AM, Warren Seen <[email protected]> wrote: > > On 25/09/2010, at 2:52 AM, Kev wrote: > > > there are plenty of wealthy people who would like to invest both to > > diversify their portfolio and to be a part of something exciting. > > There are rich corporate, medical etc folk that have lots of money but > > have less in the way of job satisfaction, etc. Many enjoy being part > > of a high energy innovative start-up. > > Speaking from experience as an employee (but not a founder) I would say > that possibly the worst kind of money comes from someone who treats being an > Angel investor as little more than a hobby to distract them from their day > job. > > I'm not saying that someone who made their money outside of the tech area > can't be a good investor, but I'd certainly be wary of getting involved with > a project where the primary investor fundamentally does not understand the > realities of software development and instead has some romantic notion that > they're funding the next facebook. > > I think this ties in well with your point about "smart money" Kev? > > Cheers, > > Warren. > > -- > You received this message because you are subscribed to the Silicon Beach > Australia mailing list. > > Guidelines on discussion: http://tr.im/ujKF > > No lurkers! It is expected that you introduce yourself: http://tr.im/ujMm > > To post to this group, send email to > [email protected] > To unsubscribe from this group, send email to > [email protected]<silicon-beach-australia%[email protected]> > For more options, visit this group at > http://groups.google.com/group/silicon-beach-australia?hl=en?hl=en > -- Dan Purchas GradConnection 044 909 7781 www.gradconnection.com.au -- You received this message because you are subscribed to the Silicon Beach Australia mailing list. Guidelines on discussion: http://tr.im/ujKF No lurkers! It is expected that you introduce yourself: http://tr.im/ujMm To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/silicon-beach-australia?hl=en?hl=en
