Although tech industry veterans know there are many good reasons to turn down
venture capital, such as concerns about giving away too much ownership in the
company, many first-time entrepreneurs jump at the chance to have a few million
bucks pumped into their startups. Not Josh Green, who is considering saying "no
thanks" to offers for VC funding in launching his first company,
Panjiva Inc.
"Any time you introduce that kind of money into the mix, you better be very sure
the direction you're headed in is the right direction, because you're going to
go there very fast," says Green, 28.
With $30,000 raised from family and friends and office space supplied by David
Rose, chairman of angel investor group
New York Angels
Inc., Green recently founded Panjiva, a Web site that wants to make it
easier for companies of all sizes to do business across borders. Based in New
York's Fashion District, the company prepares
reports for apparel
makers that rate suppliers around the world.
"There are a number of different directions we could go in, and we'd like to
have more clarity on which direction is right for our
business before we strap on a rocket to our backs," he says.
If Green rejects the $3 million to $5 million he's confident the company could
raise from VCs, where will he get the estimated $500,000 Panjiva needs to grow
the company organically? Angels, probably.
"VCs have a timeline they have to stick to, which makes them not necessarily the
most patient investors. You don't hear that as often about angels."
—Mary Kathleen Flynn
For
more on angel investment trends, see story at TheDeal.com
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