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Full Name redbaron
Display Name redbaron

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Blog Post: June 28, 2009
  • Great post.

    Just want to make the point that BURN is in fact a four letter word. It should be avoided if possible. Else keep it as low as you can. Because BURN = LOSS OF CONTROL.

    People, usually VCs, make the argument that you need to BURN to scale up. This is not true. It is just as easy to grow a company fast and be profitable at the same time. Especially software companies that can now go SaaS to avoid up front capital expenses and then spend as they earn by hosting on services like Amazon AWS etc.

    As an entrepreneur myself who has raised VC money, I would say a company's success is more often tied to to the founders staying on (at least for the first few years) in leadership positions to keep the company focused and executing,  than on VC investment.

    So keeping control is not a bad thing promoted by egotistical founders. In fact, most of the time it is just what the doctor ordered for the company's long term health (especially if you hit a few bumps along the way) and should be an explicit goal.