Venture capital funding is to tech startups what the Wizard of Oz is to Dorothy — a longed-for solution to a central problem, imbued with a sense of power and even magic. Many startup founders see snagging VC funding as a major goal. But many end up finding that VCs are too often what Dorothy discovers the Wizard to be: a chimera — extremely difficult to access and possessed of some major drawbacks.
Here are six reasons that getting VC funding isn’t always the most constructive goal for your business.
1. VC is absurdly hard to get
2018 was a banner year for VC investment. But still, a tiny fraction of businesses actually receive that funding. A start-up founder who turns to a typical VC firm that funds 0.2% of applicants has a far better chance of getting into Harvard Business School than receiving a Seed Round.