Om Malik interviews Steven Blank: Taking Venture Capital is a Pact with the Devil

Steve Blank just posted a great interview he did with Om Malik. In the interview, he talks about many different topics but my favorite part starts at 13:00 where he discusses the fact that when you take VC, you're really making a pact with the Devil.

If you've raised money at a high valuation, you've just made a pact with the devil ... your VC is no longer interested in getting 1x return. So, now all of a sudden, you've set the price at where your investors are thinking they are going to make money.

Two is though, if you've raised more money then you can even figure out what to do with, there's a funny heuristic about startups is, ... my heuristic is, if you've raised $10,000,000, you tend to spend $10,000,001. I've yet to see a startup give back money because they couldn't spend it. So, spending kinda matches the amount of money raised.

What Blank identifies is almost exactly the reason why we've chosen the bootstrap route in appendTo. When we sat down and laid plans for what we wanted to create, we realized that we didn't need the money. Furthermore, we also realized that raising money would actually have more of a negative effect then a positive one.