We Don’t Want or Need VC Money!
Yesterday, I meet the aunt of the founder of Yelp. Naturally, I looked at the Yelp website and had a few thoughts related to yesterday’s post.
Looking at the About Yelp page, I can say that Yelp is most probably funded by Venture Capital / Private Equity. Here’s why:
- Location: They are located in San Francisco. Many startups flock there because that is where the VC’s are. Further, if a VC was to fund your company, they would probably require you to move out West.
- Staff: From the picture, they have at least 50 employees! It is unclear how they generate revenue. Perhaps advertising? In general, online advertising does not produce a lot of cash. Yelp probably can not afford to pay the salaries of the 50 employees with their revenue alone.
- Experience: The idea behind Yelp is not novel. It is a social network revolving around reviews. What convinced the VCs to invest was the experience to make the idea successful. The founder was the VP of engineering at PayPal. The co-founder was the lead software architect at PayPal. Ex PayPal employees can be considered ideal for a startup as PayPal was a startup that hit it big. The rest of Yelp’s management team is experienced as well.
The possibility making anyInput a startup similar to Yelp is slim. The main reason is I have nothing to show the VCs that I could make the anyInput idea successful.
However, please keep in mind that I do not want VC money! Why? When you take VC money, you loose control of the company. VCs have a lot of say in how you run the company. If you do not do as they say, then they will oust you. Further, they want you to grow really fast so that they can reap great rewards from your company. VCs want to sell the company or have an IPO. For anyInput, I do not want to grow fast. I want a sustainable business where I can be my own boss for the long term.