A recent article in Crain’s this week discusses whether or not it makes sense for a start-up to relinquish some control over the business in exchange for capital. There are two very different business philosophies at work here – debt for growth versus bootstrapping.

While using venture-capital does not result in a loan needed to be paid with interest, it certainly isn’t a gift, either. For venture-capital to be invested, the company must relinquish some control over the operations and ownership. Many small businesses are founded because someone is sick of working for a boss, yet, with venture-capital investment that independence can be lost.

An influx of capital to a small company can have negative effects. It can alienate a small work force who takes pride in the work they do. It can cause unnecessary spending on perks such as offices with windows or an office dog walker. But it can also do a lot to spur growth within the company. Marketing is difficult for many small businesses to budget for as the cost of operations takes priority (rent is more important than ad space, the electricity and pay roll must be covered before a new logo can be developed), yet marketing, and everything that falls under that umbrella term such as advertising, public relations and branding, generates the business that is performed at said office.

Essentially, there is no right time to use venture-capital and there is no wrong time. It all depends on the company and the service or product they provide. Giving up some ownership is a downfall, yet having extra capital to grow with is an upside.