Dharmesh Shah argues that raising venture capital early shifts your focus from solving customer problems to pleasing investors. He recommends bootstrapping instead, staying flexible with multiple ideas, and viewing each company as a learning step toward your ultimate vision.
Chapters
I've been a self-funded, bootstrapped startup entrepreneur and blogged a ton about why you shouldn't raise venture capital. Not because it's evil, which I don't think it is. The key here is that it's not necessary. Too many entrepreneurs get started, it's like, I'm building this software business, here's what I want to do, and the first thing I'm going to go do is write a business plan or a PowerPoint deck or do something and then go off and try and raise capital. That's a mistake, because as soon as you try and do that, essentially you shift your mode from solving a customer's problem or an industry's problem into solving the investor's problem, and those are not the same problem. If you can avoid it, don't raise capital too early on, especially if you're a first-time entrepreneur. Dream big and execute small, and what I mean by that is that if you are starting a company, if this is your first one, it will not be your last. It's a genetic flaw. You're going to do it over and over again, and the way to think about this is that Your big dream does not have to be embodied in your current company. For instance, it's completely okay to say, oh, I'm gonna do this bootstrap startup. Someone's gonna offer me $15, $20, $25 million, I'm gonna take it. And there are lots of people that argue, it's like, oh, you didn't dream big enough, and you should've held on, and it was growing, and why not take the cash? And here's why. It's because the cash funds the next dream. And it's okay. It's like, you will have plenty of ideas, I promise. Like, your issue is not that you don't have ideas. Your issue is you have too many, and it's hard to tell the crappy ones from the potentially good ones.
