Worth the Price You Pay?
If your search for venture capital feels like it's getting out of hand, maybe you don't need their money after all.
"If I can prevent one person from getting involved with
venture capitalists, then I have done a good deed," says Raj
Goel. "The fact is, entrepreneurs and VCs don't
mix." If, at the tender age of 30, Raj Goel sounds like he's a
scarred veteran of the entrepreneurial battlefield, that's
because he is. Goel has been in the IT consulting business since he
was 16 years old, and he formally established his current company,
New York City-based Brainlink International, in 1994. "We were
here long before the dotcoms," he says.
$40 Billion:
Estimated amount of venture capital invested in
2001. $104 billion was invested in 2000
SOURCE: National Venture Capital
Association
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As the IT world morphed during the late 1990s, so, too, did
Brainlink. It wasn't surprising, then, that in late 1999, when
the company was positioning itself as a "broadband provider of
DSL services," that Goel, like everyone else with the word
"broadband" in their corporate curriculum vitae, started
to hunt around for institutional venture capital so he could
capture what was certain to be an expanding market. Content Continues Below
What makes Goel's tale such an instructive one for
capital-hungry entrepreneurs is not that he succeeded or failed-or
even how he succeeded or failed-but, more important, why he decided
to stop the process before it was completed. Goel's gut told
him he wasn't going to succeed in his quest and that even if he
did, the time and energy he would have to spend on it before he
found success would far exceed the benefits he would ultimately
derive from institutional venture capital.
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