The Most Important Question to Ask Before Taking Seed Money

There is a certain well respected venture capital firm (VC) that has a program for fledgling entrepreneurs.   The teams that are selected get a desk, a small stipend, and advice for a few months from experienced VCs.  I could imagine back when I was starting my first company thinking this was a great opportunity – especially the advice part. Here’s the problem.  A few years into the program, approximately 25 teams have gone through it.  The sponsoring VC funded one team and passed on the other 24.  None of those other 24 have gotten financing from anyone else.  Why?  Because once you go through the program and don’t get funded by the sponsoring VC, you are perceived by the rest of the investor community as damaged goods.

 

(Full Post: http://cdixon.org/2009/10/30/the-most-important-question-to-ask-before-taking-seed-money/)


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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: Funding Options & Sources