For a startup, an institutional market of investors exists for companies that are looking to hit home runs, seeking explosive revenue growth and quick exits. However, the trade-off is often loss of control over the business. Daryl has written an opinion piece for the GLOBE AND MAIL, examining the collapse of Vancouver's Bench Accounting, which had raised more than US$100-million and serviced 11,000 small businesses.
What went wrong? What lessons should we learn about the consequences of taking large equity investments from institutional investors, whose goals are misaligned with the founder’s vision. This article is a cautionary tale about the hidden risks of institutional funding and, more importantly, how companies can protect themselves.