Direct Public Offering
VC and angel investments are very difficult to get. You can spend months perfecting your pitch and never find an interested investor. Less than one percent of businesses receive this kind of funding. As our pie chart shows, private investment capital only represents about 4% of the total capital that is available for investment. The rest is in the public markets.

Even if you do get this type of investment, it often involves giving up control of your company. Many say that when you get VC funding, you’re hiring your new boss. And founders are not infrequently fired by VCs.

When the deal between you and the investor is hammered out, guess who holds all the cards? You will probably be asked to live with some terms that you are not happy with, including a lower valuation than you might feel is fair.

Also, VCs and most angels expect a fairly high return on their investment in a short amount of time. Most of the businesses they invest in don’t make it, so the ones that do have to cover the losses for the others plus make a reasonable return for the wealthy folks that give their money to VCs to invest. You will almost certainly be pressured to put fast growth above all other concerns. The investor will also expect an exit event which usually means you will have to sell your company.

When you raise capital through community investment, from a large number of small “retail” (non-wealthy) investors, you call the shots. You decide on the kind of investment you want, the offering price, and how your investors will ultimately exit. Your investors will not have any control over the business unless you want them to.