The entrepreneur VCs want but can’t have
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The entrepreneur VCs want but can’t haveRead time: 1 minute Welcome to David Beats Goliath. Let's aim for higher ground, overcome the Goliaths of conventional thinking, and lead a purpose-driven life. Prestige of Raising MillionsVC money brings prestige. It signals that you know how to raise funds. But some entrepreneurs apparently love to raise money for the sake of raising money. Case in point: Adam Neumann — the co-founder of WeWork. Within two years of launching, the guy raised over $24M at insane valuations — the kind typically reserved for tech companies. But WeWork wasn't a tech company. It was essentially a glorified real estate rental business, akin to Regus or similar firms. Despite this, top-tier investment firms like:
…poured money into WeWork? Why? FOMO (Fear of Missing Out). Refusing VC MoneyNo VC in the world wants to admit they invest based on FOMO. But VCs are human. FOMO is real. Those who missed out on pumping money into Uber, for instance, were eager to find the next big one. Many VCs are aware of this behavior. Yet they persist because everyone plays the same game and they don’t want to miss out on the opportunity to play. But what if a stellar entrepreneur refuses to play the VC game? What if, instead of raising crazy sums of money, a founder raises just what she needs? This is the type of founder VCs love, but can’t invest in — because the founder won’t take the money! Beauty of BootstrappingMost founders don’t need to raise massive amounts of capital. Many underestimate the power of bootstrapping a business. My rule of thumb (even for my own ventures) is to always start by bootstrapping. If the business takes off, you can always raise funds later. But if it doesn’t, then you need the time and patience to steadily test and grow your business—without an investor breathing down my neck. Be the entrepreneur that VCs want but can’t have! Aim for higher ground! |
David Beats Goliath
Underdogs, Misfits, and the Art of Battling Giants