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As a startup founder, you really need to understand how venture capital works


Before you raise money as a cash-strapped fledgling startup, it can feel like every problem you are experiencing would go away if you just had some money in the bank. At TechCrunch, it often seems as if every other startup story is about yet another fun company raising satchels full of venture capital.
Millions — billions — of dollars are flowing toward upstart tech companies of all stripes, and as the de-facto news hub for the startup ecosystem, we are as guilty as anyone of being a little bit on the “cult of capital” side of things. One truth is that successfully raising capital from a VC firm is a huge milestone in the life of a startup. Another truth is that VC isn’t right for all companies. In fact, there are significant downsides to raising money from VCs. In this piece, I’m …

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