Venture Capital is currently driving the conversation on entrepreneurship.
This leads to bad entrepreneurship.
First and foremost, VC capital can be great.
For the right startup at the right time, it can really make a big difference and allow companies to grow into new markets faster.
But to make it the end-all for all startups is nonsensical.
VCs only invest in 1% of the startups they meet. That means 99% of startups chasing venture capital are, in effect, wasting their time.
Wasting time is a mortal sin for every founder.
I would argue that VC capital is hurting far more startups than it’s helping. Most founders would be better off doubling down on bootstrapping (AKA fundraising through customer sales) or finding a handful of angels with a diverse set of skills to help the company move forward.
In Denmark, 93% of first investment rounds are funded by business angels.
For some reason, we talk about the VC journey as the standard of entrepreneurial journeys.
It is the black swan.
It’s a path available for only the few that happen to live up to a very strict set of conditions (timing, market share, speed of execution, etc.).
My advice:
Stop trying to game your numbers into unicorn territory and focus on building a solid business instead.
If the stars then align to open up for VC, consider it, but beware — there are as many downsides as upsides to going on that journey.
A unicorn is a mythical beast — i.e., it doesn’t exist in the real world.
Take it as a hint as to whether you should be chasing it…
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