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3 Startup Financing Myths You Should Avoid

Leading Blog

I F you are building a startup, you’ll find no shortage of people who are willing to give you advice, particularly when it comes to raising financing. Like Jerry Yang who started Yahoo, as investors we are looking for entrepreneurs who are obsessed with a new technology. Unfortunately, much of this advice is wrong.

Finance 373
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Venture Capitalists Get Paid Well to Lose Money

Harvard Business Review

Investors have perpetuated a compensation structure where VCs can generate significant personal income over their career, even when they make no money for their LPs. A recent article quoted several VCs supporting the idea that entrepreneurs should be paid $100k (or less) per year until their companies are profitable.

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The Social Sector Needs to Take More Risk and Accept Failure

Harvard Business Review

If we think about what venture capitalists do well it boils down to this: Identifying the right opportunities, backing the right people, and finding ways to help entrepreneurs succeed. An entrepreneur earns the right to more time and more money based on the results. The opposite is true in the social sector today.

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Start Networking with People Outside Your Industry

Harvard Business Review

First, if your network has become too narrow, you limit your options in case of a career change, or a downturn in your company or industry. He embarked on a networking campaign that forced him to meet each week with people outside the company, including executive recruiters, venture capitalists, startup entrepreneurs, and more.