Keep Your Feet on the Ground When Seeking Funding for Small Business–3 Myths to Watch out for

Entrepreneurs seeking funding for small businesses are easy prey for many supposed venture capitalists who only end up taking over your business or driving you to bankruptcy. Don’t fall for some of the myths people may tell you about how “easy” it is to get small business funding from a venture capitalist.

• Myth #1: You will retain complete control of your business. If you go the route of seeking venture capital, rather than a bank loan, this just isn’t possible. After a single round of financing, company founders seldom retain any control over the business and its acquisitions, financing, and other key decisions.
• Myth #2: Taking less money than is really needed will retain the value of your company. In reality, the more valuable company is one that has the resources to succeed. You won’t be able to “flip” a failing company, especially if it doesn’t have a funding source, so borrow all of what you need and then work hard to pay it back if needed.
• Myth #3: You will be able to select the right VC for your company. In reality, the “right” VC will be the one who delivers a term sheet. In theory you should be selective about who you choose to go into business with, but in reality, there is seldom much choice at all.

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