They need to have the power to compel founders to believe that they need outside investment, and they need to trade significant amounts of equity for that.
Today, with everything available it's become easy for small companies to bootstrap their way through all stages of growth without any conventional investment. Begin with personal savings and maxing out credit cards to allow a tiny handful of founders to build an MVP that gains credibility and perhaps even generates some revenue. Then use things like crowd funding to scale up to bigger projects, mitigating the risk of burning through savings during development and of failing to get market traction at the same time. Then hit the ground running with a product that's already built and already known to be valued by the market and simply rake in revenue. Or go back and hit another cycle of crowd funding.
You don't even need a merchant account to charge people money for things. Compared to the way things were even 10 years ago the scales have shifted a great deal in favor of founder autonomy.
Today, with everything available it's become easy for small companies to bootstrap their way through all stages of growth without any conventional investment.
Can you name a large startup that hasn't taken investment? Oculus, maybe.
Begin with personal savings and maxing out credit cards to allow a tiny handful of founders to build an MVP that gains credibility and perhaps even generates some revenue.
That's incredibly risky. If it doesn't work, then you won't be able to make another attempt for years while you try to recover. The value of VC investment is that it insulates you from those risks. I've seen firsthand just how ravenous the effects can be when the "avoid investment" philosophy is taken to its extreme. So the question becomes, why not take VC investment from VCs who aren't interested in company control?
"Today, with everything available it's become easy for small companies to bootstrap their way through all stages of growth without any conventional investment."
Try building a bridge or an opera house or a car factory without outside investment. There is a whole world outside our small bubble.
Those things aren't startups, just construction. Construction works on traditional lending, which provides an incremental rate of return. VC investing is about getting a small company off the ground and snagging a piece of it in the process, in the hopes that it will become a huge company in the future.
Do investors need any power over founders?
Yuri Milner's philosophy seems to suggest they don't.