Would you take VC? Why or why not?

I've started two VC-backed startups, the last one we've raised $90m+. The next business I'll bootstrap/self-fund. I think this decision about raising or not all boils down to two questions: 1) what kind of business do you want to run, 2) how much capital does your business require to succeed?
What's important to internalize is that raising VC money is a one-way door. Once you take significant outside capital, you're locking yourself into a very specific path of growing your business. And it's not just about taking capital or not, but if you're giving up control during that funding round. As soon as you give away board seats and give investors blocking rights on certain company decisions, it's not (just) your company anymore. Any larger investment will require you giving up control, but there are plenty of examples of angel/seed rounds where the founders didn't have to relinquish control. (Indie.vc, earnest capital and others are making that even easier now.)
I think the ideal path is to bootstrap as long as possible and get the business to default alive (ie cash flow positive). Then you can decide which path to take. If you see huge upside and capital can help get you there faster and significantly increase the likelihood and magnitude of the outcome, it could make sense to raise capital.
Last point is that many business just require outside capital because they are capital intensive or there are competitive dynamics at play that force you to raise money (eg network effects).

Dude I find it surprising that this is even a question.

If you have a brilliant idea and if at all fucking possible you should not take VC money, you should want to capture all that value for yourself.

Now what you'll realize when you have that brilliant idea, is that scaling it fast without the iteration cycle of 1. get users 2. make money 3. reinvest that money to scale becomes impossible without a lot of cash - and if you don't take this cash, someone could just copy your idea, take all that cash and scale it at a faster rate than you and drive you out of business.

The rate-of-growth compared to your competitors battling for marketshare is a brutal all out no-holding back slaughterhouse, and the people with good ideas are straight up bloodthirsty murderers when it comes to marketshare and competition. There is no two ways about it, read the stories of larry ellison, bill gates or mark zuck. If you don't understand this and can't stomach this as someone who wants to have a great successful business - the VC's will smell this weakness and you'll have trouble finding funding at reasonable terms.

What is reasonable terms for funding btw? - the ones that get you the most money by giving up the least equity and least control.

The only advice I can offer is that the answer to your question is strongly predicated on both (as many have pointed out) what you want out of the experience of growing a company as well as the nature of your company.

I think a lot of the comments here oversimplify the latter point - that is, there are some business models and ideas that simply cannot grow without an external capital injection. You simply cannot compete at scale in some markets without the initial investment money and competing at scale might be a starting prerequisite.

Granted, I will say that is isn't impossible - my company works in the enterprise software domain and is fairly capital intensive, but we started off as bootstrapped. Hope that helps.

Some companies need funding to start - whether its founders that don’t have the savings to bootstrap it, or the model needs to spend $1MM on ads just to attract a userbase, or there is some heavy tech that needs extra development.

Others don’t need it - perhaps the founders have saved up enough to fund it themselves, or perhaps it’s not a super tech heavy product.

Either way, I’m glad we were able to bootstrap Discosloth since it’s given both of us 100% equity, and greater income and flexibility. But if I was going to do something else I wouldn’t hesitate to bring on investment.

I would probably try to find an angel investor rather than a VC, though, since that would let me retain a good degree of freedom and control. There are many folks who have money they want to put into projects rather than just sitting in the bank.

Think about why you created this company and then work your way backwards.

If it's to have freedom and earn enough money while working on something you enjoy, it's probably not worth taking any funding.

If you're looking to build out something large, ambitious and you could have competitors following close behind, you should probably raise.

Raising funding is more for swing for the fences, while bootstrapping is for the type of person that's happy to run a lifestyle business.

One thing that I know for sure is that you should not raise a cent if your product hasn't been proven with a market need. The pressure isn't worth it and you'll end up disappointing yourself just as much as your investors.

"If you don’t take money, they can’t tell you what to do."
~ Bill Cunningham

I heard this quote when I watched Bill Cunningham New York a few years back and I think about it often. It's not to say I'd never take money, but it doesn't interest me.

There is a necessary distinction between outside funding and VC funding that would be helpful, here.

VC's have traditionally operated under the assumption that 90% of startups fail. The pressure is high for the startups. But the returns only need to come from the 10%. The VC's will squeeze you. Their interests are sometimes at odds with the businesses they are investing in.

Funding, on the other hand and in a much broader sense, has the potential to allow a business to double down on value-generating efforts that are simply not possible without money. The full-time, side-hustling Indie Hacker who has validated business growth and simply needs time in the day to drive value to his business might really benefit from some funding.

It's the model that needs to change.

I highly recommend checking out https://earnestcapital.com/ run by @tylertringas. He's setting out to flip the model on its head so that funding entities and their incentives are tied and aligned to the mission of the businesses they invest in.

This is how @bentossell gets to double down on Makerpad. He's partnered with Earnest Capital.

My experience is that VCs aren't really V, in terms of if you can answer their questions then there's no risk in what they are doing. For an indie hacker, who knows the answers to typical VS questions, and has a working product and paying customers, many times it's easier and less risk to go to the bank and ask for a credit. Unless you need really a HUGE amount of many. Chances are high that you don't.

At the beginning we were looking for capital for NameRobot. But it quickly turned out that it was good that we didn't get anything. Many just wanted to see funny numbers no matter how unrealistic they were.

With other funding types we would have had to leave a lot of "shares" in the company, which in many cases was simply too much for what we had already been done.

If I would accept another VC for another company, I don't know. Depends very much on the conditions.

In January I set up my third company with two others. But if you have to give up 20% to 50% of your company, plus the pressure you get, I'd rather think twice. Often VCs want monthly reports, then targets have to be met. This is so much pressure that you can hardly concentrate on the goal.

So I think if you accept VC, both sides have to be satisfied somewhere and that's difficult. With private VC this is often easier. There are now also VC that give you a little more freedom and go to your side with certain things (management, help in product vision etc). But I'm skeptical about banks, for example.

If conditions are right, both sides understand each other well, why not. But accept VC blindly, nope.

For me it's about control. I'm an indie hacker for the freedom. If you take someone's money, (most of the time) you have to answer to them. I rather work for myself and keep all the decisions in-house.