Why you should never invest in a startup company

I was talking to some folks at an MIT spinoff company. They may need a cash infusion this summer. Why? They got a $ 1 million grant from the U.S. Navy. The money was supposed to start flowing last fall. But then the Navy installed a new computer system for managing these research grants and payments. It is now “chaos” in Washington, D.C. The Navy still wants them to do this research but the money won’t flow until this summer, roughly a 9-month delay.

This is a good illustration of why you never invest in a startup! It is impossible to predict all of the ways that things can go wrong and revenue can be delayed.

Philip Greenspun’s Weblog

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