How do I know if venture capital is right for my business?
I spoke to an Asia-based VC from Sequoia Capital, who described their job as 99% saying no, and 1% begging founders to let them invest.
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Example: they spoke to a fantastic founder in a neighbouring country and instantly knew they wanted the deal. They got on a plane THAT EVENING, flew down with a term sheet, and got a signature.
The irony is, most founders think they’re slow.
This is the reality of venture.
It’s not a case of VCs only being a good fit for a minority of businesses…
…it’s that venture is simply WRONG for almost everyone.
Too many founders fail to understand this.
I see people blaming VCs for lack of vision, procrastinating, being indecisive and even for discriminating.
Perhaps there’s some truth in this, but personally, over the last 15 years in startups, the only thing I’ve seen VCs discriminating against is…
Mediocrity.
The thing is, there’s nothing wrong with mediocre growth prospects.
In fact, it’s probably a good thing.
You can still grow a multi-million dollar business.
You can still exit for life-changing money.
And you won’t be in the crosshairs of the big tech competitors or AI firms.
(Not yet at least.)
That means you can build a business on your own terms.
You can take holidays.
And you won’t have to deal with liquidity preferences.
The fact is, most founders should avoid venture capital completely.
Either bootstrap or raise a “one-and-done” round from friends and family.
Then, get profitable as quickly as possible.
Create optionality.
Then grow with non-dilutive capital and retain control.
For 95% of companies, this is the way.
What am I missing?
