VC(Venture Capitalist) Money Isn’t Free Money

My knowledge and awareness towards Venture capitalists was 2022, when FTX was raising a lot of money. He was raising this money almost every time because lots of us were seeing the success we thought FTX was achieving. It looked really easy coming from Sam BankMan Fried, then I started noticing that lots of tech and fintech companies are alive today all thanks to Venture Capitalists investors. Every now and then you read on the blog that a start up raised $X Million from venture capitalists and later on you read on blogs that some startups have shit down after raising money and it all feels like raising this money is easy or just may be they are getting it for free. source

To burst your bubble, it’s not free and it’s not as easy as you may think. One of the sweetest money you will ever earn is the money you earn from your customers, money earned with profit, is the sweetest. Because the moment your service or product gets to the customer and they are satisfied, you get paid what other business feeling is better than that? You don’t have to pay the money back as long as your customer is satisfied and have used your service or product. But when you collect money from venture capitalists, it doesn’t end there until they make their money back with profit. When a venture capitalist gives you $1, they don’t expect to get $1 back, if you need more time to make the returns, they will give you that time to make the returns no matter how long it takes you.

Things happen, business starts and fail, but before they fail, they must have made some money and profit for the venture capitalists before they shut down, this way the venture capitalists don’t lose their money. So if you want to collect that money to invest in a startup think of how you are going to pay the investors back. Make sure you have a great solid plan that will work out enough to pay the investors first before you consider taking your profit.

Posted Using InLeo Alpha