Everyone wants funding for their startup. But lets see if Venture Capitalists are good or bad for your startup
Investors find finance amusing and even more, when VCs do things unusual. For instance, when they don’t fail to fund the companies that are on the verge of the fall. No doubt, Venture Capitalists are more aware of the finance and its matter than the Angel Investors and hence make more valuable decisions. This attitude of VCs is out of their wide perspective they possess; their background with tons of experience and expertise; above all, they are big shots hence possess much cash in their pockets than in the investors pockets. Often times, when VCs continue to fund failing unicorns, it creates a confusion in the investors mind of whether they are missing out the wider perspective. In short, VCs leave Investors in thinking.
In process, VCs don’t seem to be understandable at all while the innocence of investors is put in perplexity. Funding a company which is not able to make profits, which seems to be old school and which is on the verge of the steep is like littering money for nothing. It is not at all funny and reasonable to witness VCs putting up huge money on a firm which is in downfall. However, this doesn’t change the downfall of the firm but rather the firm ends up moving more downside and spares money more.
On the other hand, Investors cannot help the situation because it involves too much money and there is a higher risk when dealing with VCs and the firms which rate themselves according to the funding that they receive from VCs. This behaviour of VCs affect the Indian Start-up ecosystem which doesn’t allow a good team to win the accolades. In a way, VCs being supportive to a firm which is burning cash thereby driving the rest of the start-ups out and invisible in the market. Hence the bet is never on the best man.
But the picture is all blurred until we consider VCs to be normal and those who can also make mistakes. There is no rule in the book that whatever VCs do is correct and there is a hint of misconception in their mind too, for they are also humans just like the Angel Investors. Just because they have no factor of money, they play a high-level game in the start-up community which marks the ugly face.