I make miniature investments, rarely more than EUR 5-10,000. I sometimes take a seat around the beautiful board table – but probably don’t.
I think it’s in your interest to take little money early on, because that way you get the least dilution. Ideally you take a little money and use that to build something that gets you your next round at a higher valuation. I tried to that in TraceWorks myself - and I’m pretty satisfied with the current spread and valuation .
I offer lots of advice, about everything from technical platforms, communication strategy, corporate identity, and all sorts of go-to-market stuff … but of course I can’t force anyone to take it.
Besides not having time to get really involved in anything (besides TraceWorks and Wulffmorgenthaler) I also realize that independence is one of the reasons people want to start startups in the first place. And frankly, it’s also one of the reasons startups succeed.
One concrete consequence is that my funding lets you sell early, if you want to. I think startups will increasingly opt to sell themselves when they’re small for a few million, rather than take more funding and roll the dice again.
If you take a large amount of money from an investor, you usually give up this option. But I realize (having been there) that an early offer from an acquirer can be very tempting for a group of young hackers. So if you want to sell early, that’s ok. I’d make more if you went for an IPO, but I’m not going to force anyone to do anything they don’t want to.
Seth Godin say’s “small is the new big”. He’s so right about that. The balance of power is shifting from investors to hackers. It’s getting cheap to start up a company. The ways of the future is perfecting the formula of starting out small and offer hackers the best possible deal. Small is the new big only when the person running the small thinks big. It ‘s all about bootstrapping.
