Does Too Much Early-Stage Capital Hurt a Start-Up's Chances for Success?

Posted by CFOWISE under Startups
From http://www.cfowise.com 5315 days ago

Interesting Question on Start-up ventures - Does too much capital hurt their chances for success?

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Written by ShawnHessinger
5314 days ago

Hi Ken,

Thanks again for the thought provoking post. I edited a blog on business bootstrapping for a little over two years so I suppose I have a bias here but I have really become skeptical of the value of huge start-up capital early on. (By the way, Twitter, which has no actual revenue of its own making it a completely venture funded company, may be the example you and your friend both seek of success with big funding...if Twitter proves a success, that is.) However, Twitter aside, it seems to me that often people want funding to start a new business without any clear idea of what they want it for. Another way of looking at it is that there is no better way to grow your company within the constraints of its cash flow than to resist large investment in the beginning to create overhead before knowing whether your business has the cash flow to support it.

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