Somewhat related to the discussion: Why do start-up's need so much money?
We live in a world where a software start-up needs basically $0 in cap ex.
If the founders don't have existing financial obligations and can live in a place that isn't the BA or NYC or Seattle then they can make a lot of progress for peanuts.
Venture Capital is essentially paying for 1. The founders existing financial obligations, and 2. The ability for them to live in an extremely expensive part of the world.
The only other thing that a VC provides is a financial reason not to work for a large tech company that's going to pay the founder hundreds of thousands of dollars a year.
I mean, yeah, sure. But if solving a problem is your goal, not "being number 1" or whatever then who cares about your competition. You are (hopefully) in competition against problems and reality, not other companies.
Sure, but if you're solving the same(or at least somewhat similar) problem to another company, the one with more resources absolute has an advantage and will probably in the long term edge you out by having more features or sniping your prospects with better marketing or any of the other things you can do when you have a large war chest.
We live in a world where a software start-up needs basically $0 in cap ex.
If the founders don't have existing financial obligations and can live in a place that isn't the BA or NYC or Seattle then they can make a lot of progress for peanuts.
Venture Capital is essentially paying for 1. The founders existing financial obligations, and 2. The ability for them to live in an extremely expensive part of the world.
The only other thing that a VC provides is a financial reason not to work for a large tech company that's going to pay the founder hundreds of thousands of dollars a year.