The quantum of fund raise has not only become the bragging points but most of the publications and news sources make it the ultimate yardstick of success for a startup. Basis on that companies are made ‘unicorns’ and founders become ‘billionaires’, while the truth may be that the ‘real’ business is actually struggling.
With great money, comes great accountability to deliver.
While this is the prime trade-off, there are several collateral damages like giving up stake, giving up freedom and haggling with not-so-friendly VCs.
PG advises to take the first reasonable deal in point 13 :
“We advise founders who go on to seek VC money to take the first reasonable deal they get.
If you get an offer from a reputable firm at a reasonable valuation with no unusually onerous terms, just take it and get on with building the company.
Who cares if you could get a 30% better deal elsewhere?
Economically, startups are an all-or-nothing game. Bargain-hunting among investors is a waste of time.”