I recently read a post "How-VCs-Work" on the venturewood blogsite which was an entreprenuer's take on what I suspect is lack of interest by a VC, the royal ignore that many budding entrepreneurs get from the VC community.

It got me thinking, do we always need big money (read VC) to set up or grow a business?

Let me start by saying that I am not advocating not taking funding support. My submission is merely that lack of this support need not be the reason to not go ahead with your business plan.

It seems now that we have almost completely forgotten how to establish a businesses without a VC bank-rolling us. Not so long back (10 years?) the breed we now know so well as VCs did not exist in India. And yet we did manage to establish businesses many of whom have become icons in their industry segments.

Not having a VCs support forces you to think out-of-the-box for resources. I have heard so many business plans that seek money to build what could be bought. The most common example of this is in the planned organisation structure which seeks to "Hire" people in every function. Not having the money would perhaps force you to use outsourced service providers and free-lancers, often better people than what you would ever be able to hire. The same logic applies to infrastructure and other CAPEX. Lack of money makes you think and focus on core competency like nothing else does!!

Generally, it would be hardest to find backers for new technology and disruptive ideas. Sadly, they are also the ones that seem to need "risk-capital" support the most. But in my own experience, these ideas in almost all cases will take a lot longer to realise the market promise the than you think. Eventually, it all boil down to what is the "right" spend-rate and therefore how long does one need to fund this spend before you turn cash positive. In general, not having money will only mean that you will have a much lower spend-rate. You will not hire and address as many markets as your would have, you would not be able top build a product a featured as would have liked to, your support and delivery systems would not be geared for the hordes of customers you would expect to have. Sounds like a recipe for disaster. But there is a very good chance that you would have spent good money and built way ahead of any takers. "If you build, they will come" rarely works for such business ideas.

There are so many good business ideas that ran through their cash spending faster than they need to and eventually had to close shop.