Entrepreneurial Reading

It's a lazy sunny Sunday as I sit on a patio chair reading the March 2012 issue of Inc magazine.  Most of the articles are on entrepreneurship which has me reminiscing about my startups and my journey into Silicon Valley with my first tech company.

One of the first things I encountered was the huge difference in the mentality of Angel investors and Venture Capitalists here in Calgary, Canada and those I was meeting and presenting to in the Valley.  In Calgary they wanted to know how much of our own money we had put in and even then they wanted to own most of the company. 

In the awesome Inc. article on Howard Tullman, the manic super entrepreneur and investor who has a dizzying array of accomplishments, says it best.  The entrepreneur's stake in a startup should be his time, and only his time.  "This idea that you have to go into hock and mortgage your home and starve is bullshit," says Tullman. "I tell entrepreneurs this all the time. If these VCs' come along and say 'Would you work for $5?' find different partners."

As I continue my entrepreneurial reading I come across another article on the file-sharing startup, YouSendIt.com and the nightmare the founders went through.  If you think all Silicon Valley startup stories are magically uplifting, they're not.  In this one the VC's really screwed the founders bringing in $5 Million and leaving the founders with 3% each even though the company had over a million dollars in earnings that year. 

I call it stealing the souls of the creators.  They then fired the founders as YouSendIt went from 300,000 users to 100,000.  Beware, startup entrepreneurs!  It might be better to continue to toil in the Valley of Darkness than sell you soul to the devil.