The heart of a venture capital deal is an exchange of cash today for an obligation to grow the value of your company and eventually find an exit. Hopefully the reason that you raised venture is that value growth and exit were in your plans anyway, in which case the major difference is that once the money is in the bank it becomes much harder to change course, e.g. to run a lifestyle business. In other words, raising venture capital commits you to a path.
If you hit your plan then most likely you won’t want to change tack and raising venture will simply have been an enabler. It will have got you access to cash and other resources that will have helped you build your business. The bigger difference comes if you miss your plan, in which case raising venture will most likely have limited your options you have going forward. When an investment misses plan most VCs will either want to double down and have another go at hitting the original plan or sell early, and they will exert whatever pressure they can to make their preferred option happen. That is their duty to their investors.
To read the full, original article click on this link: 50 Questions: If I raise venture capital what differences will it make to how I have to run my business? « « The Equity KickerThe Equity Kicker
