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Perspectives August 26, 2015

Not Every Startup Should Be Venture Backed

A quick gut check

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In this record fundraising year, (and despite the recent hiccups, record year in the public markets) we are beginning to see a lot of companies raise institutional venture capital simply because it’s widely available and the Silicon Valley bull market default. Many people feel they have to take venture capital, or they get pushed into it by investors looking for opportunities. This is bad.

Out of the approximately half million businesses with employees that get started every year, only about a thousand are venture-backed. However, in the current environment we are conflating “technology startup” with “venture-backable.”

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