Five reasons venture builders are your start-up’s best friend
Even with a failure rate hovering around 90 percent, anytime someone leaves their day job to bring a technology-based startup to life, it’s hard not to get excited at the sheer potential. Most founders would have a better chance of planting a flag at the top of Mount Everest than their idea taking of, but a passion for their idea—inspires them to take to take a risk many never will.
Once the idea has been solidified, charting a path to build a successful venture often starts with looking for investors. From poring over trends and developing business models to connecting with potential customers and tweaking revenue forecasts, the culmination of this work is a story that answers the question: Why this idea is worth investing in?
Then there is the work of sorting through thousands of potential partners who could help bring the business to life. According to Startup Genome, the startup economy created $2.3 trillion in value from 2015 to 2017, but despite the booming ecosystem, 91 percent of founders say it is extremely challenging to find the right talent to scale their businesses.
The emergence of new verticals—Bird’s micro-mobility, or any number of growth areas like advanced robotics, AI and blockchain—will only compound this issue.
With more of these shifts in markets and tech ahead, a venture builder is a perfect option for many founders looking for help navigating the demands and skills needed to create a foundation for the long haul.
Here are five reasons a venture builder might be your best bet:
1. In it for the long haul, from the beginning
Unlike accelerators, who nudge along growing companies with education, mentorship, pitch practice, and network access, a venture builder starts sooner and goes deeper. That means they get their hands dirty in building the companies and bringing them to market supporting with shaping the business model, building the technology, shaping the team, acquiring customers, and raising capital.
This shared interest means venture builders bring a completely different kind of relationship to their investments from day one—almost like co-founders, as motivated as you are to see you succeed.
2. Higher rates of success
It sounds simple, but it’s true: The likelihood of venture builder–backed companies to make a return and exit multiple are 60 percent compared to just 5 to 10 percent of those in startups with VC.
Founders can think of venture builders as a insurance policy but like any policy, there is a premium. Many venture builders will charge a fee for service and/or take a small portion of your company but if you have early-stage funding you can tap into resources that will help you with your funding, market fit, product development and get you to your first dollar of revenue. Make sure the fee that you pay matches up with the resources and the experience of the venture builder.
3. Predictable and efficient time-to-market
Venture Builders are able to accelerate your time-to-market through repeatable models for testing and evaluating market fit, reusable code bases shared resources with venture building experience, marketing strategies and extensive ecosystems. This kind of predictable formula for launch is what separates venture builders from accelerators.
4. Focused portfolios create shared value
Sometimes a founder needs to find a partner who has chosen to go deep in technology, industry or a specific problem the world is solving. Venture builders like Obvious Ventures have chosen to focus on startups that create new solutions to big world problems in a profitable and scalable way.
5. Depth
Many founders are simply just farther along than what an accelerator can offer so they need more sophistication in strategy, marketing, product development, and product development. Tangelo is positioned as a startup studio that has the kind of depth that helps mid-stage startups take their companies to the next level of growth.
Sources:
https://www-01.ibm.com/common/ssi/cgi-bin/ssialias?htmlfid=IML14576USEN&
https://www.cbinsights.com/research/startup-failure-reasons-top/
https://www.prnewswire.com/news-releases/2018-set-to-be-a-better-year-for-startups-300589829.html
