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« U.S. Loses Technology Innovation Leadership: Ranking Drops in Networked Readiness Index | Main | Vonage: My Two Cents »

April 09, 2007



VCs should NOT be first choice for funding and instead, more of mid to last resort for funding. Entrepreneur should try to do self funding (e.g, own saving, family, friends, customers, etc.) to some degree if possible. They ought to use self funding to develop a prototype or something which they have tangible to take to potential investors as well as to customers.

By them using their own money early on, the entrepreneur will put some serious thoughts behind the company, product, value proposition, customers, etc. It will also give them more negotiating leverage over VCs otherwise VCs will want most equity and leave little for the founders.

Also if there are any patents issues, they should make sure that they area filed before disclosing to others as such their intellectual property is protected and prevent VCs from stealing the ideas and bypassing the entrepreneur for own advantages.

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