Bigger Isn’t Always Better: How A Big Round Can Hurt Your Startup

“In the tech sector, you’re better off selling shovels than looking for gold.”


[tc_contributor_byline slug=”geoff-mcqueen”]

When you’re a struggling team eating away at your meager savings and trying to get yourstartup profitable, venture capital funding seems like the holy grail.

Raising money from investors gives you the resources to grow your team, buys you time to do things properly and gives you no small amount of credibility in the eyes of other entrepreneurs, prospective hires and even some clients — not to mention mom and dad thinking you’re now successful.

While all of this is true, there’s a pervasive belief in the industry that entrepreneurs should aim to raise as much money as possible, as often as possible. It might be true in some circumstances, but here are three reasons why raising as much money as possible is often not in the best interest of the entrepreneur or the company.

Raising Money Is Like Buying Dinner

When you sit down at a…

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