Ben Huh and Talia Mashiach: Chase After Revenue, Not Investors

October 29, 2014

11:00 am

In an article about how starting up screwed up his life, entrepreneur Ali Mese talked about the pressure – from his friends, no less – to raise money as a sign of startup success. But is raising funding all it’s cracked up to be?

“There’s a lot of irrational thinking on what VC fundraises are,” said Cheezburger CEO Ben Huh at a Tech Cocktail Sessions event in Chicago last month. “I think it’s important to celebrate those milestones, like ‘Hey, we just raised a whole bunch of money.’ But it’s like saying, ‘Hey, we just took out a huge mortgage.’ Nobody throws a party for that.”

In other words, you might think that funding gives you freedom, but it actually gives you the opposite: obligations.

“You have to grow the business, your revenues, your top-lines, your metrics, to justify the next round of valuation to make that VC happy, so it’s an obligation you have to fulfill,” said Huh, who has raised over $60 million himself. “Revenue is harvesting what you’ve already accomplished.”

Talia Mashiach, the CEO of Eved and our other speaker at the event, agreed – despite herself having raised $11 million. “Revenue is much more important. Take revenue any day over VC money. Anything possible to not take additional funds outside is the best thing you can do.”

That sounds like: hold out as long as you can, but at some point, you might have to make some concessions in order to stay alive.

For more from Huh and Mashiach – including what it’s like to work for Huh, Mashiach’s thoughts on work-life balance, and what makes a good startup employee – watch the full video:

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Kira M. Newman is a Tech Cocktail writer interested in the harsh reality of entrepreneurship, work-life balance, and psychology. She is the founder of The Year of Happy and has been traveling around the world interviewing entrepreneurs in Asia, Europe, and North America since 2011. Follow her @kiramnewman or contact [email protected]

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