Mike’s Case Against Venture Capital

Posted on February 26, 2008


Mike Simonsen, our fearless leader at Altos Research, wrote an article for FoundRead this weekend entitled “My Case Against Venture Capital.”Interesting how he and I wrote our articles independently this weekend, but advocated similar positions – heeding caution with respect to venture capital’s role in funding your start-up endeavor.

Maybe its the “Altos Research Cultural Bias” in play. Since the founding of Altos Research, the company has bootstrapped – paying for growth as cash comes in the door (no pressure on the sales guy here though….). I’ve been on the other side working with start-ups with considerable cash (Aplia, Inc. with $10+ mln) and my own firm that I operated for 2+ years on angel funding. Now that I’m on the side of the “pay as you go” model, I don’t think I’d go back unless there was a viable reason. There’s a certain feeling of autonomy at Altos Research that I didn’t feel in my previous tenures, including my own company…

His article is chock full of great examples and outbound links that are guaranteed to get the gears grinding if you’re considering venture capital for your business.