It's really stupid what you are saying. Some people live with $25k per 10 years... Not everybody is rich or knows rich people. You just need to be smart to start a good company. Also only the "american" style starts with huge amount of money and burns it. It's not always good to just "fail-fast". Sometimes business needs some time, time to grow, not just "put a lot of money in it and if nobody likes it it will die."

> Some people live with $25k per 10 years.

Not sure what that means or how it's relevant.

> You just need to be smart to start a good company.

Short answer is, No. Longer answer is, if you're really smart a) you realize what I said is true and b) you'd figure out a way to raise the money.

> you'd figure out a way to raise the money

They do. They go to VCs.

Or they don't need since their business is making revenue since day 1. Okai maybe not since day 1, but its making revenue. As already said there are also businesses where you don't need any funding. Business 2 Business models mostly don't need that much money with a great idea.

If, for your first round, you end up with 10 individual investors each forking 25k, you'll end up with board management issues.

1 with 100k, 2 with 50, 4 with 12.5 : yeah, why not.

With that, you have one clear lead, with whom future investors and bank can relate to.

My bank wouldn't have bankrolled us if we had 10 "small" investors from the start.

[This said, I'm no expert on the subject, just anecdotal evidence...]

None of those investors would get a board seat.

Yes, your breakdown is both preferable and more likely. But my point stands.

Your point stands, however, I didn't mean "board" management literally. I should have said "shareholders management". I'm not entirely familiar with US corporate law, but on roman based civil law, 10 investors with 25K of seed capital (ie non trivial amount of % votes) can get messy.

(although we did create a board with the breakdown I suggested, because we were lucky to pick the "right" FoaF investors, attorneys and counsels)

Under U.S. corporation law, shareholders have very little ability to affect corporate management, unless they own a large enough stake to impact board elections. In a start-up valued at $1MM post-money, these 10 angels are not going to own more than a couple percent each, while the founders will control 75 percent of the company. The founders will have more than enough voting control, assuming they vote together, to ignore the investors.

He might be talking about Canadian law which I would admit can be goofy with respect to startups. But I still don't think it's that big a deal.