Money makes it easy for people to lie to themselves, and to other people. None of the entrepreneurs who started Theranos, Nikola, Fast, Juicero, and WeWork would have gotten very far with what they were doing if they didn’t raise cash from investors.
Cash can cover up all sorts of problems, or at the very least numb the pain. If you’re an entrepreneur who’s really trying to build a business with a strong foundation, you don’t want to cover these problems up. You want to work on them directly. You want to experience the pain and understand what’s causing it.
As David C. Baker puts it, “Debt enables you to cover up things that need to be looked at in different ways, it keeps you from having to make the tough decisions, and it forces you to clean up the past if things go bad. I never want to do anything but clean up the future. I’m a huge risk taker, and I take a lot of risks with money. I spend a lot of money, but it’s money that I have saved up that I feel comfortable wasting if I need to.”