Always Have 18 Months of Cash in the Bank

The question of when to raise money is one of the few times that entrepreneurs and early-stage investors have somewhat divergent economic interests. If you control a large investment fund, you always have the option to extend a company’s runway. The entrepreneur doesn’t have this option. I’ve even heard some entrepreneurs whisper about Machiavellian VCs who deliberately try to get you to the end of your runway so they can negotiate harder. I think this is a bit of a conspiracy theory. Almost all VCs I know care primarily about the success of their companies and not about extracting every last point of equity.

 

(Full Post: http://cdixon.org/2011/12/06/always-have-18-months-of-cash-in-the-bank/)


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Chris Dixon

Chris Dixon is an investor at Andreessen Horowitz. He was previously the Co-Founder/CEO of Hunch, Co-Founder of Founder Collective, and Co-Founder/CEO of SiteAdvisor.

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Filed Under:
Collection: Funding
Category: Deciding to Raise & Raise Amounts