Amar Goel, of Komli Ad Networks has a brilliant writeup about venture capital and when it makes sense to go for it. He explains the rationale behind the VC business and the need to balance your own plans with that rationale, before you embark on your quest for seeking venture money. Here are some invaluable pearls of wisdom from his detailed post:

“…the sexiness of a press release saying you raised venture capital from XYZ and ABC lasts about 1 day…”

“…if you want to build a $3M business over the next 5 years do not raise venture capital…”

“…VCs are not in the business of coming up with crazy ideas and then throwing them against the wall and seeing if they stick. That is the job of entrepreneurs….”

Go read the entire article here. And thanks Amar for thinking straight and communicating clearly.

Why am I linking to this article here? (this incidentally is my first blogpost referencing completely another blog article) Well, I interact with a lot of first-time startup entrepreneurs in India and most of them don’t understand the venture capital business (and that partially includes me as well). Venture capital is hugely glamourised in India (as it is in other parts of the world) and many of its seekers have little clues about its internal workings. And when they don’t landing funding deals, it leads to dissapointment and frustration. IMHO, much of the blame in this situation lies squarely with the entrepreneurs themselves. This article is a must read for them.

(via Alootechie)