VC funding. It’s something that you read about almost daily on someone’s site. Every new venture seems to be getting money pumped into it and you can only imagine how much easier that makes their lives right? Well that’s what I thought until it happened to us.
Last week we were offered a “generous” sum of money to fund some of the projects that we wished to work on. Initially, we jumped all over the offer for the simple reason that we continue to tell ourselves that if we could get away from doing client work for a couple of weeks/months then we could dedicate 100% of our time to the stuff we really want to do. After some time though and a lot of discussion we decided to turn down the money mainly because the offer didn’t feel right to us. I wish I could say it was an easy decision to make.
I admit to being very proud of what we have accomplished with the 9rules Network in just under five months, but also realize that it is just a small step to where we plan on taking our company. I am also very pleased to see the work we are doing at Business Logs and glad to say that we are overloaded with client work. But again that is only a step in the direction we wish to take.
If we wanted to do client work for the rest of our lives then the situation we have at Business Logs would be the perfect scenario, but we wish to make our own little mark on the web just like every other startup. However, we seem to have encountered a problem that no other person in the world has encountered: we need money for survival. I know, I know this is insane, but for us this is the case and therefore we continue doing client work with the ability to make some small dents in our projects while also running the Network.
37signals talks about how bad VC funding is and the fact that it is anti-Web 2.0. Well Scrivs talks about how they have been one of the most successful design firms in the world since 1999 so they had a bit of time to save up some money and hire David to code Basecamp for them. Well then you should’ve started with a project that was going to bring in instant revenue before you worked on the Network says the audience.
In time hopefully everyone will understand why we started with the Network and why we have made it our core. In our eyes, it just made sense.
Do You Want To Be Funded?
It would be nice to know where your paycheck is coming from, but it isn’t so nice to have that added bit of pressure and departing with a share of your company. However, as my good friend Mike Davidson likes to say:
Better to own 75% of $1M than 100% of $0.
And wait till you see what his new company is coming up with…hotness x Web 2.0
Before last week I thought if we ever got an offer for funding I would take it no matter how ridiculous it was simply because it would free up a lot of time to devote our resources to secret projects #1-85. But that wasn’t the case and believe me its not easy walking away from six digits. Now we just know that if we do take any funding it will have to be an offer we are comfortable with and not just one that allows us to work on what we want to work on.
Are You Looking For Funding?
Like the question above the answer is yes and no. We are not actively seeking out VCs to talk to, but we definitely won’t turn our backs if any wish to speak with us. We can continue to move along doing what we do, but probably not at the pace we would like. We don’t need funding, but we do want more time away from client work.
Don’t take this entry as an excuse for not getting things done. On the contrary, it probably has more to do with our inability to turn clients away. It’s tough to walk away from the new challenges presented to us daily. With that said we have decided to devote small periods of time to what I call Quick Hit projects. What are they? Nothing special. Just offering services that are already available, but just doing them a little bit better. A little bit more our way.
Finally, let me offer this piece of advice to all the CEOs of young startups out there. I know how it feels to be responsible for a team of individuals that look for you to guide them and help them reach that big payday, but if a VC comes with an offer and it just doesn’t feel right to you, then just walk away. There will be more down the road.
Originally posted on October 3, 2005 @ 2:49 am