3 Ways VC Money Can Be A Wolf In Sheep’s Clothing

For 99% of entrepreneurs just graduating college, chasing or sometimes even getting venture capital money is counterproductive to true entrepreneurship, the learning process and, occasionally future success. Young entrepreneurs should be aware of a few reasons as to why this is:

1. Opening a business is not about having a salary or having someone to support you

Not having a stable paycheck is very scary for both the young and old, however this fear and uncertainty is an advantage unlike any other. A young entrepreneur’s best friend is his or her drive to succeed and to have the ability to work for themselves while making the money they desire.

Just like when corporate employees become complacent and dependent upon their paycheck, the same can happen to the entrepreneur when VC backing comes into play. Poverty is a driver. It’s a creative driver that can easily be lost in any industry with an influx of too much money.

The young entrepreneur must remember that all successful artists started out as starving artists. The most educational job I’ve ever had was when I was a doorman in college because it showed me what life would be like if I didn’t work hard to pave my own way.

2. The young entrepreneur is not mature enough in business to run a fully backed, staffed and operational company

You cannot learn business in a classroom; you can only learn numbers and theories. Before being responsible for others, the entrepreneur needs to show that he or she can take care of themselves. Leadership and management is a crucial aspect of business and is too complex to dive right into right after college graduation.

Before anything else, the entrepreneur must learn how to properly manage client accounts. Then and only then can they manage others under them. Venture capital firms know this and when they decide to back the young entrepreneur, they come in and essentially fully take over the business that the individual started.

3. The young entrepreneur does not fully know the potential of their idea yet

Before handing their idea to others, the young entrepreneur needs to spend some time on the market determining how they can best tweak and alter their offering to fully monetise it. If a young entrepreneur has an idea that is creative enough for venture capital firms to show interest, he or she should use that not as a sign to sell, but as a sign that the entrepreneur is potentially on to something big.

I am unsure as to why many young entrepreneurs think that gaining venture capital backing is so prestigious, though I strongly urge any real entrepreneur to stay away from venture capital firms until they have spent a few years on their own.

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