I’ve talked to a couple of founders recently who just finished raising or are about to embark on their first raise and they’ve asked, “what if I don’t want to grow this into a venture scalable business?” and “what if I’m ok with slow growth that gets me to profitability?” My response to these founders and their vision: Then do that, that is a valid route to take.
Taking money from a VC is not the right path for every business, nor is it the right path for every founder. Many founders do want to grow their businesses rapidly into venture scalable businesses and those founders should raise from VCs. Others sell a vision that involves raising an initial round from either angels or pre-seed VCs and then growing the business at a sustainable pace until profitability and they may never raise another round again. This second path could very well lead to a 2x-3x return for those early investors. While it’s not the 100x early investors would like to see, it’s also not a complete loss.
The bigger issue for founders and their vision at the heart of this matter is does the founder feel like they’re just building a business for their investors, or do you they feel like they’re building the company that they want to build? After all, their company is their baby and without the founder to sell a vision, the vision for the company often (but not always) disappears. The founder and the founder’s vision is ultimately why any investor decided to invest at this stage (it has less to do with the idea or the product because pivots happen constantly in the earliest stages). If a founder feels like their building a company just for their investors, building it will feel like pulling teeth.
Mental Health also plays an important role in the calculus here. You only have one life to live, you don’t get a second chance, so do the things that bring you the most joy and fulfillment and try to minimize the things that don’t. Some things cannot be avoided, but the things that are in your control should be minimized. If building a business feels like it’s going to be miserable because you’re just building it for your investors, take a step back and re-evaluate why you wanted to build this business in the first place. Then move forward with the path that stays true to your vision and brings the most fulfillment to your life.
Read more articles for FOUNDERS here.
