I own and run my business. 100% I wake up, work and answer to no one but myself. My company even survives (and thrives) without the ‘dreaded customer as your boss’.

Sridhar: You are talking about balance. I’d agree. Most of the companies you mention of a) Did not raise funding b) Had established themselves that they had bargaining power. So My points still hold.

Great post. Cool new design for the site.

Agree with everything except … “the only way to scale it is to give up control” or “entrepreneurs who want to own more than 50% of the company. Thats almost the sure way to kill the company”

IKEA, WIPRO, WALMART, LINKEDIN, RIGHTNOW, CRAIGSLIST etc. (as far as I know) are examples of how the founders tried hard to retain control and majority ownership successfully … to ensure they always retain the risk taking ability and freedom to only focus on the long term.

To the contrary I would argue … raising VC captial some times creates artificial time frames to increase the valuation … even when the market for the company may take longer. It’s easy to draw up a spread sheet with expected 25% return p.a. then life moves at it’s own pace !!

Equity investments are also like loans … and the expected payback keeps growing … even if it’s on paper.

Not that I totally disagree with what u said … but it’s the ambiguity of AND that rules start ups …

One needs to accept that the business belongs to the investors “AND” try and own it as your own as much as possible

If someone comes up to investors with just an idea on paper, then maybe yes, but to assume that that is the only way forward when taking an investment is stretching it too far.

There are a ton of ways for business owners to get what they want without giving what they don’t want to give. Like bank debt is much cheaper in the long run and when someone is anyway betting the farm when starting up, why not risk bankruptcy too along the way There are other ways too if one is creative.

If only there was more energy spent on building solid foundations of businesses instead of focus on just ideas and investments. Maybe then more businesses will reach their goals without diluting again and again (your 2nd round comment above) to cover up for their failures.

Or do you think that investors really are that important and its an exception to be able to build businesses without them?

Regarding voting rights: It has nothing to do with the laws of the land. A company is governed by its Bylaws and you can draft whatever you want within it following the guidelines set by the Corporate law. Its possible to do 10x voting rights in India too, but you see any company as explosive as google around? I doubt any investor would agree.

And about the Google founders’10x voting rights stocks, do you think Indian laws would permit a similar stock here? Which founder wouldn’t kill to have a 10x voting right stock!

@Kalpesh: I was expecting someone to pull out that line, and I’m glad you did.

a) You will easily give up 20 – 30% of the company when you raise your first round. Another 20% for ESOP and whats left is 50%. You will end up diluting that in your second round which is inevitable.

b) There are also scenarios like the google founders where they carry 10x votes. So even if they have 10% of the company, they almost have veto rights. But they had built a powerful company before the investors came onboard so they had the power to negotiate.

Hope that helps. In short, I dont think you can raise funds easily with a minority stake.

V.