Sunday, December 7, 2008

Take the money or run?

When I started Tandem, I decided that it would be great to do it without finding any outside investors. To be honest, I didn't want to share the fruits of my hard work with someone just because they had some money lying around to let me borrow. I didn't have millions of dollars in the bank, but I did, luckily, have some clients with some projects. And I didn't have a noncompete with my previous employer. So off I went, funding Tandem through project work and trying to run lean.

You may have noticed that the economy is in a recession. It was in a recession when I started Tandem, but nobody was calling it that yet. Now, however, all of the VC that was probably a bit easier to get when I started is not so easy to come by. Check out this TechCrunch article on VC and start ups that really echoes my sentiments. Not only is the nature of VC changing, but project money is a little lighter too. What to do, what to do?

The answer is get innovative. The answer is to look hard at everything that you're doing and cut out all but the important stuff.

I'm not saying I would never take on additional capital. But I am saying that I'd have to feel pretty justified that there were no other options, that I really would need it.

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