Funding from an angel investor or venture capital firm has its lures. In addition to having money to quickly scale your idea, seasoned investors can lend advice and help steer your company to profitability. Yet plenty of entrepreneurs intentionally do everything they can to forgo funding. Marty Puranik, president and CEO of cloud hosting solutions provider Atlantic.Net, says he’s reaped a handful of rewards from never taking an outside dime in his company’s 21 years of doing business.
1. You’re the boss.
How would it feel to have an investor meddling with your strategy? “If you ask most entrepreneurs why they start their companies, they’ll probably say freedom is their primary reason,” he says. “They’re free to make their own decisions, free to call the shots, free to make the product they want.”
2. You have time to make mistakes.
Accumulating entrepreneurial wisdom involves learning from mistakes. But when you’re on a fast track with an infusion of cash you might hire people with skills you lack and never get exposure to all aspects of your business, which could be costly once your company has scaled and those people are no longer around. “Let’s say you hire a COO, and that person is really good at negotiating from a vendor. You’re never going to learn to do that yourself,” he says. “You can become a better, well-rounded business person by doing it yourself.”
3. You can focus on your business.
Taking money means chasing whatever metrics your advisors are after. “This is important because those metrics can change,” he says. “At one point it might be total subscribers, then it may change to paying subscribers. Later it might be profitable subscribers. It’s very difficult to keep changing to fit whatever investment thesis is hot.”