CyberTech Rambler

December 7, 2009

One reason for needing the backing of Vulture Capital

Filed under: Uncategorized — ctrambler @ 12:44 pm

Not all Venture Capitalist are Vulture Capitalist and for startup, Venture Capitalist offers more than financial support. If any, the recent saga of TechCrunch shows us what VC brings to the table that can be extremely helpful.

Here is what happened: According to TechCrunch, they are screwed by their partners at the  very last minute. [Their partner, Fusion Garage is said to be poise to reply shortly]. The crucial text in TechCrunch account for me is

“We had blue chip angel and venture capitalist investors in Silicon Valley waiting to invest in the company since late Spring. We were simply holding them off until we launched, to eliminate some of the risk.”

That to me is their fatal mistake. Yes, they don’t need the money, And sure, VC involvement will bring some risk, and we cannot discount being screwed by VC instead of partners. I summarize TechCrunch problem as naive  when it comes to the business of manufacturing and being seen as small and easy to bully.  A VC  would had bring in business management expertise that make sure all paper works are in place with the partners, give the project size that will deters the partners from taking advantage of TechCrunch, and finally, a team of dedicated lawyers that are fluent in the subject matter, all of which TechCrunch lacks and needs.

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