In my last blog, I have provided you with multiple reasons on why you shouldn’t consider taking funds from a Venture Capitalist (VC). Apart from the constant stream of funding from these VCs, there are other benefits that comes inherent with working with VC firms. And hence, in this blog I would like to tell you the other side of the story.
Free management consulting: If you are a first time business owner, or slightly weak in handling all the aspects of the new business, then it might not be a bad idea for you to pick an experienced VC with some knowledge /expertise that you might not have. If you pick a VC, who has started his/her own business before, then he might be of a great help in writing a strong business plan, making a killer product, or keeping your finances straight. In order to get the best VC for your venture, do your self assessment first, and then find out a partner who compliments you. Because most VC firms will have equity in your firm, their desire to help manage your company could be a boon to you if you don’t have those skills.
Access to free workforce: Most of the time, as a new business owner, you might not know everything that you need to know about opening up your own business, but you can get some outside help. And this kind of help is mostly available with many VC firms. Most of the VC firms provide expert business consultants on their payroll who can help you with things like marketing, distribution, research, and more. Having this open channel of help with the expertise that your organization might lack can improve your ability to compete in your space.
Find the brightest talent: Recruiting intelligent and hardworking people for your startup is going to be a challenge for you. But if you have a well connected VC as your partner, then the firm can help you find people with the specialized skills needed to help your business grow. Some firms even have HR people to help the companies they’ve invested in staff key rolls. This can be of huge benefit to you who want to mitigate the risks associated with hiring the wrong people for key rolls.
Although your banker or other financing source has an interest in your success, sometimes you will be better off by taking the funding from a VC firm, for all of the above reasons. Please share your comments here, if you agree/disagree with my blog.
Thanks – Bhavin Gandhi