Perhaps your dream is to own a lifestyle business where you’re the boss of your business and you make more than you would in a job- that’s it. Or perhaps you have a plan to develop a product that you can sell to Yahoo or Google for $10 million in 2 years. Or maybe you dare to dream big- a $100 million company that can compete with the big boys, and may need Venture Capital someday.
You must have heard about entrepreneurs who wrote a business plan on a proverbial napkin, got VC funding, built a product, and made a lot of money selling it (the company, and optionally the product too).
Well, the reality is that far too many first time entrepreneurs end up in the heart-breaking position of seeing their companies get “successfully” bought out, but only the investors make some money and the entrepreneurs lose out completely.
For a startup to have a fair chance of success (hint: why do the vast majority of startups fail?), you have to do it all in the reverse. First you find a customer, then you go build a product that the customer wants, and when you are making money (selling the product) … that’s when you go raise Venture Capital.
But why would you go to VCs when you’re already making money?
To grow your company fast!
That’s what VC money is meant for. To grow an existing company with a customer and a product and revenues. To grow it faster than would normally be possible by relying simply on revenues from customers.
Understand that not all hi-tech startups need venture capital. Not all of them will get venture capital. Not all of them will succeed with Venture Capital. Yet, many can and will succeed even without Venture Capital. It all depends on the kind of business you have in mind. And regardless of the kind of startup you’re dreaming about, chances are that you’re at least a year away from Venture Funding if you’re still at the dreaming stage.
The interests of the entrepreneur are not being served optimally by other organizations that seem to cater mainly to the needs of the venture capital industry.
It is up to you to decide how to build the company of your dreams. Join Agile Entrepreneurs to learn how to make informed choices, avoid common mistakes, and maximize your chances of success with your startup.