alarm:clock

- Friday, October 5, 2007

Penny Wise or Pound Foolish?

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Super Mario the blog-master at LinkedIn gets in touch to see if we could contribute a question that is a topic of the day. This question came to mind:

"In this market environment is it better for an Internet startup to take as much cash as possible or stay lean?
Marc Andreessen recommends you take as much cheap money as you can find whereas others like Guy Kawasaki argue that the cash heavy venture capital model is broken and suggest you should sip on cash."

In our mind this question was about the internet economy. It's just not possible to build a viable semiconductor startup, for example, on the cheap.

Answers so far have been fairly mixed with most going with Kawasaki and other siding with Andreessen. The perpetual fix that founders face is that they see competitors closing in and raising funds but they also now that if they hold out a bit longer they might increase their valuation.

Add your comments if you care.

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