I can relate to most of what you're describing but wanted to point out that your business (any business) is a lot more than "core" of your business. If you're content with the rate of growth, you are already profitable or don't need additional funding etc. than you may not need the VCs. PG's essay repeatedly states not to raise money. But if you do want to make strategic investments, accelerate growth, etc. you will need to do many things that are outside the "core" of your business. In that case you may try to find VCs that have experience doing that, or at least can open doors for you so that you can find the right people to help you get there, etc.
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I can relate to most of what you're describing but wanted to point out that your business (any business) is a lot more than "core" of your business.
Yes, but I've been a B-school prof, and last month got
a lesson in business: A house in my neighborhood
in NY USA had
the shrubbery too tall, and a crew was hired to come in
with a chain saw and cut back the shrubbery. They had
a nice new truck. My guess is that they were recently
from Mexico and that the lead guy was there running all
his business. And he was doing fine without an MBA
or VC!
Basically, for millions of businesses in the US, the
non-core functions get handled plenty well enough by
just the founders without help from an MBA or VC.
I did mention Khosla's recent remark on
how much VCs help founders run their businesses.
Your point about "strategic investments" may be correct:
Sure, a standard PE idea is a roll-up. However,
I'm not sure that really VC capital is the best
for such investments, but in some cases maybe it is.
For "growth", I don't see the crucial need for VC
given that the VCs want to see a lot in traction,
at Series A and certainly for a growth round
after a Series A. It seems to me that
a founder should just let the
revenue from the assumed traction fund the growth.
Lots of businesses, pizza shops to auto body shops,
do, and an IT business should have an advantage.
Besides, some of PGs growth timing looks fishy
to me, especially get a VC round, hire people,
and show big results in 18 months. Maybe can
do that work and get the additional revenue
in the 18 months, but I'd have a tough time
believing that could get a good team built
-- advertize, interview, select,
move, house bought, kids in school,
spouse in a job, introduced in the office,
familiar with the office procedures and
tools,
train, build team -- in 18 months.
Seems to me that the growth bottleneck is
team building, not funding.
