Those High-flying Angel Investors: VC Panel Talks Up Creative Financing for Start-ups

Software manufacturing, software programs to defeat spam, new business data technology and web services are all areas of opportunity for entrepreneurs, according to venture capitalists taking part in a panel on creative financing at a recent Wharton Entrepreneurship Conference. And those entrepreneurs who cut costs, sign on angel investors and find other creative ways to finance their start-ups will be rewarded with more equity in their firms, assuming they become successful.

"You would be amazed how little capital [it requires to get a company going] if you are creative about it," said David Flaschen, an advisor to Flagship Ventures, of Cambridge, Mass., and former chief executive of Donnelley Marketing Inc.

Flaschen advised entrepreneurs seeking venture capital to be willing to accept professional management. "Right from the start, make clear that you value the concept of ‘foundership’ much more than ‘CEOship,’" he suggested. "What you should say is, ‘I want to make this company interesting and strong enough that we can hire the most effective chief executive officer.’"

Full Story: http://knowledge.wharton.upenn.edu/index.cfm?fa=viewArticle&id=1215