Finding success in starting up

Laptop and Coffee on desk

Recently I’ve been reading a lot about a growing trend of founders not taking VC capital. This is obviously pretty scary to VC investors, their lifeblood being in ROI and carry. In talking to many friends it’s dawning on me why and it makes sense.

Although many VC investors can help the company, they also can bring a lot of baggage founders are not looking for early. This might even be the beginning of the resurgence of garage startups. Guys coding in living rooms. Bootstrapping and being scrappy.

For the past many years the industry became awash with cash, companies that raised showed such success and grew so fast it became a vicious cycle that huge capital is needed to start up anything. I think innovative people are bucking the trend to control their destiny and once again harken back to the days of starting small and building things that matter.

Early, if you can get sales and can pay your rent, you might have everything you need to grow fast. Early sales can be a big indicator of need.

But also the scenes characterized in the show Silicon Valley remind me of the thrill that comes from hacking away in a small apartment on a product that you believe in. It’s what many of the greatest founders did for a long time. The show SV typically mocks and parodies this, but it could be having a resurgence. The romanticizing of VC and huge capital has also left many companies completely blindsided by massive problems in their models and their companies simply shuttered.

Huge layoffs, and huge upsets by VCs invested in the 6 and even 7 figure marks. Many times capital can push companies way past their market size would even allow, and the market will always dictate the outcome in the end.

If founders are saying no to investment capital early, it could be a very good indicator of good innovation to come. That people are working on things for the pure joy of building, as it once was a long time ago in the Valley. It could also strengthen their company to be more cost conscious, so when more capital comes it isn’t spent in a massive drain.