While VC’s are a necessary part of growing a startup, they can kill it too. I’ve seen this happen too many times where the VC’s kill the goose that laid the golden egg. They’re so driven by financial goals that they interfere with great startups that just need a bit more time to ‘gel.’
A recent study commissioned by Eric Paley at Founder Collective found that by pressuring companies to scale prematurely, venture capitalists are indirectly responsible for more startup deaths than founder infighting, technical debt and slow customer adoption — combined. via Techcrunch
Quite honestly, if you create a startup and start making money from it, why really scale? With scale comes so many other headaches. The reason I say that is Mike Carson (aka Uglychart) was recently interviewed by Indie Hackers about his company Park.IO. He’s a one man shop that runs everything on AWS and allegedly makes a small yearly fortune. The one takeaway I got from this interview was that he wants to be a one man shop. With growth comes so many other headaches and the danger of losing control.
The same goes for Engineering firms. My buddy in CA says the same thing, he never hired people and grew his consulting business because he hates managing people. He’s always too busy but makes a great six figure income.
Where’s the line? Hard to tell but it really depends on the Founders. If it were me personally, I’d do what Mike and CA buddy have done, keep it small but profitable.