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Massaging founders' egos is a very popular reason to raise money, but it's a dangerous one because you are diluting all of your employees — and for some people it becomes a status game.
Simon identifies ego-gratification as one of the six reasons founders raise VC money, warning that it's rarely discussed but widespread, and cautions that it harms employees through dilution while turning the startup journey into a status competition rather than building a business. ✦ AI generated
Simon Eskildsen · The Pragmatic Engineer · 2026-07-21 · original ↗
This is a very, very popular reason! You see big numbers, you get lots of press. But I think it's a really dangerous reason to raise money. I wish this reason was talked about more, because you are diluting all of your employees when you do it. And for some people, it can become a status game. It's not what we are about: we're here to build a big business together.
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The hardest ingredient to replicate in building a Silicon-Valley-like ecosystem is not talent or favorable laws but a culture that grants social status and prestige to people who start or join new companies — something almost no country besides the US, and to some degree China, has.Ben Horowitz · a16z Podcast · conf 70%Founder exits should be evaluated through annual, pre-scheduled, non-emotional board conversations, competing against a maximizing window of roughly 12 to 18 months.Sarah G (host) · No Priors · conf 60%