Look at when SEOMoz and Github raised money: they were already multi-million dollar businesses. Raising money was entirely justified.
If you're a B2B product with a revenue model, you don't need funding, you need patience.
Look at when SEOMoz and Github raised money: they were already multi-million dollar businesses. Raising money was entirely justified.
If you're a B2B product with a revenue model, you don't need funding, you need patience.
Just one example: I work for Cloudera. As I understand it, we raised a fairly large round when we had almost no employees or revenue, and weren't exactly sure what we were doing. And we absolutely needed to. Hadoop wasn't mature enough for most businesses yet, most businesses weren't really looking to do the things that Hadoop is letting them do yet, and the company was nowhere near mature enough to know how to support enough big enough customers to pay the bills anyway. We needed time, so we needed funding.
3+ years later, everything has matured and there will certainly be no talent acquisition.
More generally, your claim doesn't seem to make much sense. Why does raising money make a nascent company more likely to sell out for a small talent acquisition? The real reason that companies that raise early sell more than companies that raise late is that the set of companies that raise late is a biased sample. It is, by definition, a set of companies that got too big and successful to be talent-acquired.
In the current landscape, early companies that haven't yet started printing money may well find that their best option is to take a fairly large check and work for someone else. I can't see how investment would make them less likely to get past that stage; investment gives them more time to figure out their business, and less incentive to sell because investors will get a cut and not really want them to.
Basically, I have come to be of the opinion that the types of businesses that need funding for critical first steps are B2C businesses with no revenue model other than advertising which need a huge critical mass with a lot of infrastructure investment before it can become profitable.
If you have revenue, you don't need a springboard. You just need to wait. There isn't one dry cleaner in New York. I love Chris Savage's post on this topic where he's talking about the idea creation process before Wistia and saying basically that although there are a bunch of companies that already do what you're doing, it's really hard to get people to pay attention online and saturation takes a really long time.
If there's only two of you, break even point is really low, and that's all you need.
Some are preoccupied with glamour and glitz, Actin all boogee and making big movies, But I'll be in the cut call me Incognito, Busy makin joints that will bump for my people, You're listening to a man who was something for nothing, Stay in me forever head, never be frontin
You could do that but you are risking a lot. A well funded competitor with competent founders who understand the market like you do would likely outperform you. (Emphasis on competent founders).