February 28, 2013 AT 12:58 am

More founders reject VC money

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More founders reject VC money @ Crain’s New York Business.

..an increasingly vocal group of entrepreneurs who are adopting what might be considered the tech-industry version of sustainable farming practices: spending only as much as they can afford, focusing on customers, being nimble enough to switch directions when products don’t take off and taking on as little investment as possible.

The shift involves a fraction of startups: Very few of the thousands that launch each year last long enough to worry about VC funding, and most that do would be glad to take any money they could get. But longtime observers say that attitudes are changing, as founders become leery of giving up control or of accepting more money than they know what to do with.

“What I’m beginning to see is a new group of entrepreneurs who are being much more deliberate about the size of funding they take and whether they take any at all until they see real growth in their business,” said Nicholas Chirls, who runs seed investments at Betaworks, a Manhattan-based incubator and seed-stage venture fund.

These entrepreneurs, he explained, don’t want to end up like the ones who raised millions of dollars in recent years, failed to gain traction and now “are not sure what to do with the money or themselves.” In a recent blog post, Mr. Chirls described “the 2013 startup” as a throwback to a simpler time and a sign of more mature founders.


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