Recently I have been visiting a young passionate startup company. Their passion brought back reminiscent flashes of how our team had sought to obtain funding and support in the past. Yet at the same time, it is a reminder of why I had not sought for funding but am bootstrapping it from infancy. To me, funding is something like taking painkillers. The problem is there, and you are just suppressing it. And with the time it buys you, you scramble for the cure. But anyway… I present below: My top three reasons why I chose not to get funding!

1. You forget your purpose. The team’s objective becomes somewhat warped and instead of being market-centric, it falls into the danger of becoming VC-centric. Everyone starts to bother and be overly concerned as to what are the proper things to do, to say, to show in order to get funding. Big plans will soon be incorporated with your plans together with “conservative” astronomical earnings which no one ever believes in. In the end the entire team is confused and forget that what they started out to do was in fact to build a great company.

2. You forget your cash flow. With successful funding, it is extremely convenient to forget all the large plans and projections spelled out during business plan and proposals. Because of that huge war chest of cash stashed up, you are more liable to sit back and relax as you pass by months with no company revenue at all. Or at the very least, the need to secure clients would be much weaker. This all goes well and smooth until one fine day when you wake up to an empty bank account, you will then suddenly recall the fact that every cent that you have to pay your staff or yourself actually has to come from customers.

3. You forget your sense of urgency. By this I mean urgency as a whole, not merely product development. This urgency includes important factors like market engagement and operational breakeven points, business development, etc.
Because your financial dependency is not on your external customers but on your VCs, your feedback and engagement with them is kept often at a lower level. With this disengagement, you start developing things that suit your own purposes and needs, rather then your customer’s.
Very soon you will start asking “how come no one uses our products though we have so and so features and our competitor only has one”

Disclaimer: I am not against funding. Just that the nature of my business at this point of time does not require me to. Also, I am in the IT line, and my comments are probably very much skewed towards IT. If you are to come from a different background, eg biology, My sentiments might not apply.