Investors

Do You Want To Be Rich or King?

By November 30, 2016 No Comments

This is a favorite closing line that venture capitalists use to seal a deal.  When you’re starting out, you own 100% of the company, which means you call all of the shots.  You are the king.  However, most companies eventually hit a growth plateau that requires capital to break through.  It is at this point you have to decide whether you want to be king or rich.  The implication, of course, is that by taking an investor’s money you’ll become rich.  While there may be strong arguments for fueling growth through outside capital, it’s not without its disadvantages.  Investor’s terms can be quite onerous, and compel you to do things that you wouldn’t otherwise do.  Examples of the interests of investors and entrepreneurs diverging abound, and usually to the entrepreneurs disadvantage.

There’s no right answer – yours will depend entirely on what kind of business and lifestyle you want to create.  Many entrepreneurs get mesmerized with the idea of building a $100 million company, and believe the only way forward is to take an investor’s money.  While this may be true, there’s nothing wrong with growing organically.  Ultimately, your happiness should determine your answer – would you be happier being rich or the king?

Matt Sand

Author Matt Sand

Passionate about making a difference through innovation and entrepreneurship.

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