The point in time when most entrepreneurs find themselves in a dilemma about how to move forward their ideas. It’s at this particular time when they find they have been running with their idea bootstrapped and they have run as far as they can on their own pockets and they will need the financial backing to run the next few miles. Yet when they put on their well-pressed suits, polished their elevator pitches and head off to the VC firms with their ideas they are told the idea is great but “we need to see a working model and revenue stream”.
A little too often entrepreneurs look at VC firms as the “holy grail” of building a successful business. The amount of funding can become the ultimate objective and take focus off what is really to be achieved. Often moving towards getting VC funding like a horse with blinders on they can lose track of who else is around them that can help. It’s almost as if the success or failure of the business depends on the “yes” or “no” the VC firm will declare based on the pitch. Not only does that put excessive pressure on the startup where it’s not quite required, but it confuses the priorities at this stage for the entrepreneur. Rejected by VC firms who find the idea a little too premature to invest large sums in to and finding it pointless to pursue without being able to inject a little capital into getting the business started, this is often a breaking point for many great ideas and the point where some early stage startups may even …breathe their last.
Fortunately (for those who gasped at the last line) this tragic end need not be the end at all for early stage startups with the development of the VC 2.0 and crowdfunding investment models. In fact this is the very segment of entrepreneurs who can benefit from the Grow VC platform and look to secure funding for their businesses. The community approach can really help challenge your views and help create well rounded perspectives on your ideas ultimately producing more healthy and successful startups. Rather than being blinded by the purely “money” side of growing the business it drives you to think out of the box and develop a “smarter business”.
For those who find they can’t continue to bootstrap if they are to go live, build up some customers, build their applications, kick start their marketing efforts or other activities needed to grow their business, this is where they can find their capital whether human or financial. A place where they can gather not just finances but wisdom, experience, talent and strengthen their business models.
Assuming they don’t absolutely need the $15 million or so from a VC firm to proceed, they can raise a smaller amount up to $1 million through crowdfunding. This can help them grow and build a profitable business taking them to the stage when they can confidently secure larger investments from the VC firms who will now see them as “old enough” to be attractive investment opportunities.
The crowdfunding model could play a critical role at this point in the life of a startup with the community coming together to contribute in startups they believe in while addressing a serious gap in the existing seed funding market. You may be too old to bootstrap, you may even be too young for a VC firm but you can never be too young for the global community of investors on Grow VC.
