Why VC investors are bad for biz media startups

Jessica Lessin of The Information writes about why venture capital investors are bad for business media startups such as Cheddar.

Lessin writes, “At The Information, we have been funded by our customers from virtually day one. I’m lucky enough to have been able to get our company off the ground with a small amount of my own money. But if I hadn’t been in that situation, I would have still turned down the dozens of investors who have asked to invest. Instead I would have followed in the footsteps of the news companies that found another way.

“There are also plenty of strategic investors, aka media companies, around. Strategics may be more aligned with startups than traditional VCs. They may have more reasonable expectations of returns that reflect the best growth path for a media business and, overall, be a better partner. But strategics have agendas too; they either want to buy the company or, more likely, learn enough from it that they don’t have to. And for those founders who want distribution help from big companies, if you have a great product, big companies will partner with you, whether or not they are on your cap table.”

Read more here.