Yesterday I attended a small presentation from an entrepreneur who built a company from zero to €50m revenues with some 300 employees over a decade or so. They raised VC rounds of considerable amounts (in tens of millions) along the journey and their investors included top notch names known worldwide.
Knowing the success case very closely and following them during the years I must agree to his verdict about VCs: don't if you can without. Continuously all the investors promise value added which is often not industry specific or plain simply non-existing. Lower costs and increase sales is a good advice but does not help much to carry out the specific company strategy properly.
Of course there are exceptions and VCs can provide good expertise especially in the early stage investments. Also process knowledge and expertise can be useful even for companies with few hundred employees and international operations. Often the founders are not that keen on streamlining and improving things - they rather create and build.
Still, one phrase sticked to my mind: "founders squeezed continuously". It's high stakes, no prisoners.
Posted at February 17, 2005 11:54 AM | TrackBack