Why entrepreneurs think VCs should fund every project?

by Ashvini on March 16, 2011 · 3 comments

in Entrepreneurship

Every Entrepreneurs dreams of getting VC funding . Entrepreneurs look the world from a narrow point of view. They have a product , they have an idea, they see the market, they see everyone buying the product.
VCs look from a broader perspective. They look at profitability, exit, competition, team.

These two ideas are contrasting and opposite. One side has enthusiasm and energy while the other has cold blooded calculation. VCs will not be funding all the ideas that entrepreneur put in. Every entrepreneur with VC money would not get to the top.

The middle path lies in the fact who can marry these two concepts. An entrepreneur who does his analysis, has a plan and a team has better chances in eyes of a VC, while a VC who is willing to take risk in unknown markets stands to gain most when the product is successful. If out of 10 project, nine fail, VC can still make money on one successful project but it needs to take risks on all ten of them.

That is start of search of a solution.

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{ 2 comments }

Nicola Deiana March 18, 2011 at 10:21 am

I’m a little confused about the difference between entrepreneurs and VCs, but that this post you give a simple explanation. When you’re a start-up, it’s hard to know what the Big Ideas really are.

Aswani March 17, 2011 at 10:22 am

Hi Ashvini, I cannot say much on this but yes I came to know about how thinking differs for Entrepreneur and VCs. Thank you for sharing your valuable insights. keep writing!

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