Warning: ob_start(): non-static method sem_google_analytics::track_links() should not be called statically in /homepages/45/d228896108/htdocs/wordpress_34/wp-content/plugins/sem-google-analytics.php on line 159

The Importance of being Entrepreneur

Sramana has a post on venture compensation, but I found the part at the end more interesting:

I would go so far as to submit, working for a VC-funded startup is more like having any other job, than true entrepreneurship where you actually are your own boss. Entrepreneurs / CEOs answer to a Board. There is a compensation committee that decides how much you make. You get fired and washed out of your equity stake based on the VC’s whims. This may be perfectly legitimate at times, since not all entrepreneurs scale to become good CEOs of larger companies. But often, these decisions are gut reactions, not legitimate, and entrepreneurs get slaughtered due to the VCs’ lack of experience or seasoned intuition.

Personally, I have found this topic of what leads people to entrepreneurship fairly interesting. For some it is the ability to create something truly big. For others, it might be the money. And for others, being one’s own boss. The last one is certainly not the one with which you want to chase venture investment. VCs, whether experienced or otherwise, are fairly driven by the economic incentive, and hence by their desire to maximize their economic opportunity in a startup. As entrepreneurs, you need to be (a) aligned to that objective, (b) be able to protect your own objectives.

  • http://www.druvaa.com Jaspreet Singh

    I don’t like when people mix business with sentiments like being own boss and holding a key position in company.

    I am a co-founder and i am here to make money … i didn’t opt to get on board .. but was finally asked to. I will work under anybody at any position if it makes my company grow and we all make money.

    my brain and balls for my business and heart for my family … everything else follows.

  • Old Hand

    Before concluding you cannot be your own boss, let’s ask what it means. To me it means being able to set schedule, office hours, and financial goals/scale-up targets at your will. Being able to select people that you will deal with, clients you will work for, and so on.

    If you don’t take VC money (and especially if you don’t have “partners”) absolutely you can achieve the above and be your own boss.

    As capital and liquidity grows, VCs will increasingly turn marginal. There will be a growing number of entrepreneurs who truly want to be their own boss and thus don’t need VCs.

  • bb

    well said deepak

    YES, you are never EVER your own boss, except if one renounces everything!!!

  • http://www.kmonyb.wordpress.com Krish

    Most successful VCs were entrepreneurs too, that got mauled by tightwad VCs. The name of the game is “revenge of the [mangled] entrepreneur”

    It’s a *hunch* business that a VC is in. The recoupment of investor’s (LP) capital leans mainly on the VC making the right calls and in that VC compensation is more a function of LP perception. Entrepreneur, especially if he is a wet-behind-the-ears greenhorn, with no track record, starts out as a mere promise and nothing more. A couple hits down the line, he could vie for a compensation that matches or exceeds that of a VC, just in case he hasn’t turned a VC himself :-)

    So the entrepreneurial game is all about – conceive an idea, claw, mow people or go get laid to see that it gets executed. While you are in the trenches, your focus need not be on what the VC earns, but on the momentum your business will get out of VC money. Momentum means faster go-to-market, being an early bird, raising the entry barrier, catching the low-hanging fruits. Trust me; it’s the only thing that will save your stock from turning toilet tissue.

    And when you are successful, if some old wounds don’t heal and still rankle, go turn a VC and take revenge :-)

  • http://www.moneyoga.com Deepak Shenoy

    I don’t think you’re EVER your own boss. You can start a company but the minute you have customers, employees, people that you depend on or that depend on you, you’re a slave to your desk, your computer, your cellphone and your web statistics provider. It doesn’t matter that you put in your own money or got someone else to put in theirs; the latter just adds one more element of slavery but five chains are not much worse than four.

    There’s far more freedom when you have a job. If you don’t wanna put up, you hand in your papers. What do you do when its your own company? And you can’t bitch about the boss, or the working conditions. You can’t blame anyone else but you. You know you’re underpaid and will probably stay that forever. That’s not quite as fun as it sounds from the outside.

    Though, point taken, it takes a different kind to ask and successfully run with institutional capital. The difference I think is in the understanding that you no longer own the company and that the VC does. Then it all makes sense.