By Liz Elting
The Wall Street Journal - October 23, 2013
If you’re an entrepreneur, it’s probably because you’re driven by an essential need for independence. It is unquestionably easier to join an existing company than it is to create a new one, but hitching your wagon to someone else’s train is simply not an option that leads to long-term happiness for most people with entrepreneurial spirits, no matter how inspirational or groundbreaking that train might be. You have a vision for your venture, and you intend to see it through.
Now imagine you also decide to take on investors to make sure your vision has enough financial support to become a reality. Suddenly, the independence you chose becomes compromised. You are no longer the sole master of your ideal domain, but rather one player in a system with multiple decision makers. And when that happens, it’s easy to find your dream compromised and operating differently than the way you intended. It has inevitably becomes a composite that exhibits of the combined characteristics of all who have a stake in its success. That scenario is why I feel that any external investor is too many.
When my co-founder, Phil Shawe, and I started TransPerfect, we were grad students at the NYU Stern School of Business. The concept of taking on outside investors wasn’t even on our radar; we stuck with the $5,000 limit on our credit card and found a way to make it work. This wasn’t because we felt like we didn’t need any outside help; in reality, it was just a result of our own blind determination. We were entrepreneurs-in-training, and while we may have been unseasoned in many ways, we were confident in our goals for our company. The main goal? Continue to call it ours – and ours alone.
There are many hardships for those who are self-employed. The hours are long, it’s difficult to stop thinking about the business, and if you’re the one signing the checks, you’re also the one carrying the risk. But in the end, signing those checks means you’re also the only one in the position to do so. By maintaining sole control of your company outside of investor influence, you ensure that the original vision you had is the one that continues to guide the company direction.
There are many benefits to working for an established business, and none of them should be ignored or easily disregarded. But if you choose to go the route of a startup entrepreneur, you should do so with the understanding that maintaining your independence and that of your business is not to be taken lightly. Weigh your pros and cons for every move, but keep in mind that the final decision is yours to make, and that is a privilege that disappears as soon as the checks link to someone else’s bank account.
When you get to where you’re going, you’ll want to be able to look around and recognize what you see. And the only way you can truly guarantee that is by retaining total control of everything that happens along the way.