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Boot Strapping response
I am parituclarly interested in this field so let me respond to it. This is my thoughts and do feel free to comment and challenge me too!
It is usually the case that the VC will have a board seat. And it is definite that the VC will exert a certain level of influence in the company. However, in this kind of seed funding, the VC will want some control over what the company is doing so that it will not lose its money entirely in the investment and this is perfectly reasonable. The VC would however not want to take majority of the control because it is still in the seed stage and with a majority stake comes more risk. They want the entreprenurs to be the ones that take greater risk. However, what the VC can provide is expertise that they have from the previous deals that they have done and the company can also leverage on the network of the VCs too.
2. Other than amount of funding and capital needed, we feel that choosing the right type of funding also has to depend on the nature of a company’s business. For instance, in comparing B2B vs. B2C tech companies, we feel that it is better for B2C companies to choose VC funding as it is able to provide large amounts of capital over a short period of time, which is often critical for rapid or viral growth. Furthermore, VC backing also increases confidence in the technology thus consumers would be more willing to try it. In contrast, B2B companies typically face slower growth, have less clients but more focus on them. What do you think?
2. Other than amount of funding and capital needed, we feel that choosing the right type of funding also has to depend on the nature of a company’s business. For instance, in comparing B2B vs. B2C tech companies, we feel that it is better for B2C companies to choose VC funding as it is able to provide large amounts of capital over a short period of time, which is often critical for rapid or viral growth. Furthermore, VC backing also increases confidence in the technology thus consumers would be more willing to try it. In contrast, B2B companies typically face slower growth, have less clients but more focus on them. What do you think?
It is true that some of VC backed B2C companies have become very successful. Amazon, Facebook, Youtube, Google, Apple just ot name a few. But many VC backed B2B firms have also been very successful such as Oracle, Macromedia, Cisco Systems, Genetech, Sun Mircosystems etc. I think how a VC would choose a project would depend on whether they see that there is a possibility for a high return and that is critical.
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