My last post questioned whether an aspiring entrepreneur, that lacks the capital to start a company, should seek investment from venture capitalists or private investors.
Before I asked that question, what I really need to know is if it is smart for a college grade to “grab the bull by the horns” and start their own company upon graduation. Therefore, my question is…
In general, is a college grad better off working for several years for a large company and making money and connections, then starting their own business with their own capital? Or, should they seek outside capital to help start their business right out of school and learn from direct experiences and create contacts along the way?
I would argue that one would learn a lot more from direct experiences encountered while running his/her own business, than he/she would while being the “low man” at a large company.
This is my feeling. What is yours?
I agree with you that you would learn a great deal by direct experience…there is nothing quite like learning by doing. I also think that truly entrepreneurial people excel in this environment, and as long as you are okay with the potential to fail (maybe a few times), you will have a good chance of success just by being out there. In fact, entrepreneurs sometimes do not work well for others anyway.
Here are two counters I would posit:
(i) If you want to start a company that has size and scale from the beginning and/or needs a large amount of capital, it probably makes more sense to get experience in your field of choice…you will probably need it to raise the capital
(ii) It might be more attractive to learn on “someone else’s dime” for a few years
In the end, it comes down to you and your vision. If you feel like you are ready and you can raise the capital, I say go for it.
Experience is the best teacher. However it can be a tough way to learn. You are dealing with real money, mistakes can cost you plenty. Mistakes are always a part of business however experience will help you keep them to a minimum. It maybe best to learn on someone else’s dime.
You both mention getting experience on someone else’s dime.
I agree with this in most cases if one could gain relevant experience. However, i’m not sure it is the answer in my case.
My problem is that a business plan that I have been working on, if implemented, would be the first of its kind. Therefore, I would have trouble finding a job that would give me relevant experience.
For that reason, I feel like it is simply a choice of whether to take a chance with the business or not. And while I could gain capital by working for a few years, at that point I may have other commitments or responsibilities that make it harder to take a chance. I do see some value in working for a few years but I also feel like now may be the time to give it a shot while I have few responsibilities.
There are other things you could learn that would be beneficial. It might not be exactly what you are doing but you will still likely learn a great deal and can get into a somewhat similar industry.