Startup fundraising: VC or not VC? That is the question!
When it comes to startup fundraising, don’t believe (literally?) every single story you see on TV or in the movies:
The genius brainstorms the game-changing idea in the garage… the genius meets the VC… the VC gives the genius one gazillion dollars… the champagne pops inside the genius’s new Learjet.
@@If you secure startup funding, guess what? You’ve also just secured a 75% chance of failing@@ because those are the odds for every VC-backed startup. Our advice: @@don’t make VC dollars your goal, make building your business your goal.@@
Any startup coach or successful startup leader will tell you: develop your idea and focus on building your business instead of fundraising. Because @@you could have a million in funding and still have a business that’s worth less than zero@@ (pets.com anyone?).
It’s “venture capitalist,” not “adventure capitalist”
Did you know most VCs pass on nearly 99% of the business plans they see? That means even if you’re after that VC money—and the 75% failure rate that comes with it—you have an extremely slim chance of getting it. It’s because VCs are CONSERVATIVE above all else.
The first thing VCs are looking to do is mitigate their own risk. Which is why most VCs don’t get involved with a startup until later in the game, after the business has proved viable and—ironically—when fundraising is not as necessary a need. So even if your startup fundraising plans involve securing help from VCs, it’s best to not plan on their help in the early stages.
Coaching, Connecting, and Networking
What you can do in the early stages is make connections and build your network as you build your business. A startup coach can be a huge help. Yes, some startup coaches double as financial investors, others as financial advisors, but all of them should be able to help you map your strategy and—as importantly—get connected to your startup community.
Because while many entrepreneurs consider fundraising to be the lifeblood of their startups, networking is most every startup’s backbone. Connecting with like-minded leaders can help you find the people you need to build your business—both the employees and the customers—and help you pool knowledge and resources to better ensure success. And sometimes, lurking in your network, you may even come across a VC or two.
Questions about startup coaching or funding? We can help. Contact us