10 Yrs of Work Ex with likes of Volvo, TATA Group & Godrej in fields ranging from Sales & Marketing, Product Development, Channel Management & Go-To-Market-Ops. Have established many product lines from scratch in new markets.
Assured Lead Generation from Scratch
5 Stage Lead Conversion Process
Sales Process Optimization
Enhancing Pipeline Conversion
Case 1 : You want majority shares to be within your close circle.
Well, in this case, your friends and family control over 51% of shareholding. But this limits the amount of money you can raise as Investors only have 49% portfolio in your company. Now, if you want this business to be scaled upwards, this will be a limiting factor. On the other hand, your inner circle will call the shots.
Case 2 : You are ready to give a majority to investors outside your close circle.
In this case, you and you only should control 21% of equity shares in your company. This will increase the fund infusion capacity of investors. But, the risk in this case will be when few investors, together, own majority shares thereby limiting your control.
So, bottom line is all about your control on the company.
Hope this answers your question.
Couple of reasons:
1) Too much dependency on investor capital. As an investor, anyone would want returns in say 3 years, that too minimum 60% upwards on a realistic scale. This puts unnecessary pressure on the system.
2) Response in adapting to changing market demands. Slower the response, faster the start up will die.
3) Problems which are sometimes out of scope of founders i.e. government policy changes which impacts the business directly.
4) Lack of strong ethics. This is one aspect many startups are currently lacking. Most of the old companies have a strong ethical foundation.