Comments on: Builders and Talkers: The Fallacy of the Grant vs Investment Debate

By: David K

David K — Fri, 27 Jun 2014 18:16:13 +0000

Money is money and I’m not sure there’s actually a debate. Each comes with its own baggage and if there’s only one option – trust me, you’ll take what’s on the table in order to meet payroll. I think what many people find annoying is how hard it is to raise money and there’s a general sense that grant funding comes easy if you know the right people. There are just not enough VC deals happening on the continent — something to the tune of 100 in 5 years (and I’m more likely wrong about the number) is disheartening. The only thing that makes grant funding ‘evil’ is insufficient due diligence which opens doors to issues like fiscal irresponsibility and ultimately failure.

tldr; neither is good, neither is bad and any debate is a straw man argument for lack of real vc funding

By: kiwanja

kiwanja — Wed, 25 Jun 2014 22:31:58 +0000

Some great points here, Erik.

I would expand on your final point to say that timing is crucial. I’m increasingly thinking that money, too early, can kill innovation. Many of the constraints in which a product was conceived and developed – and which provide it’s DNA – are removed. I still maintain to this day that FrontlineSMS still exists because I took no funding of any kind for the first two years.

By: Bernard

Bernard — Fri, 20 Jun 2014 08:28:24 +0000

Great inspiring post. Been ignoring the debate for awhile, now I know why: There really is no debate.

By: Sir Nigel

Sir Nigel — Thu, 19 Jun 2014 22:34:16 +0000

Excellent advice.I live in Zim. We tend to be more polarised than most countries I know. The issue/question of ”who funded your venture’? is one which tends to pop up in conversation more than it needs to I feel. The funder is often more important than the venture itself 🙁

The issue of the salaries is REAL. Finding that balance is interesting for the entrepreneur.

Aluta Continua

By: Ted Rheingold

Ted Rheingold — Thu, 19 Jun 2014 19:41:54 +0000

Great post.

I’ve been comparing this discussion to US ecosystem. In the US you can compare grant money aka ‘easy money’ to a) VCs that place big bets not he table so as 1 of them can hit big and b) Large companies such as an AOL that can take massive losses in certain segments because it’s okay to be unprofitable while growing new business.

And in the US you can compare investment money to good VC aka “smart money”. These businesses are running lean and hard, but they still have to compete against overfunded under qualified businesses or against behemoth businesses with diverse balance sheets that can withstand extended segment losses.

Easy money businesses suck up customers, marketing attention, hr talent, vc dollars, etc. It sucks. But there’s no making them go away so all you can do is hunker down and execute.

By: Ben White

Ben White — Thu, 19 Jun 2014 13:32:16 +0000

I would add that there really is no ‘free’ money. If you are able to get some support from an NGO or non-profit they might not be expecting a financial return, but more likely seek return as it relates to social or environmental impact. This is where the debate comes in, for so far that focusing on impact can sometimes lead the entrepreneur to take their eye off the financials. And in the end the financials always win because without them there is no company, and without the company there is no impact. So entrepreneurs can get turned around on this sometimes and get confused.

By: Sam Gichuru

Sam Gichuru — Thu, 19 Jun 2014 12:04:23 +0000

Now we are talking…. I would add, entrepreneurs should always look for Smart Money. Money that comes with experience (in entrepreneurship not business school and management in multinational) and networks.

By: hash

hash — Thu, 19 Jun 2014 07:28:45 +0000

@Wanjiku, yeah, it’s something we all face – unfortunately.

By: Wanjiku

Wanjiku — Thu, 19 Jun 2014 07:19:28 +0000

Hash,

That point about making payroll….. very important 🙂