#3 Angelinvesting.it - From idea to Series A - Weekly Newsletter
A unicorn or a villa in Ibiza?
3 Minutes to reflect
My friends Fede, Guidozzi, and Mattia are incredibly diverse individuals. Yet, they share one commonality – they each run a small medium enterprises with several million in revenue and double-digit margins, and they've never had to raise a single euro. When you meet them, they often have a beaming smile on their faces.
Last week, I met with 25 founders who were seeking venture capital for their startups. To over half of them, I recommended that they reevaluate their approach. Instead of pursuing the unicorn dream, they should concentrate on building a strong bottom line (possibly self-financed).
As a first-time founder in particular, it may be wiser to set a smaller, more achievable goal. Goal 1: get "fuck you money" in your bank – a sufficient amount of financial independence that gives one the freedom to say "fuck you" to authority, obligations, or expectations.
It may seem odd that I am providing this advice, but there are three reasons why it makes sense:
The statistics show that it is more likely to be successful with an SME. 99% of Y-Combinator startups fail to find product-market fit.
Earning 1-2 million EBITDA per year, without having to split the profits with anyone but your co-founders, is a valuable outcome.
Some projects may have a strong digital component, but still not classify as a tech company suitable for venture capital
2 Resources to advance to pro-level
Why Peloton, WeWork are not tech companies, a step by step guide: https://www.washingtonpost.com/technology/2019/09/27/when-everyone-is-tech-company-no-one-is/
Sam Altman, President of Y-Combinator and CEO of OpenAI, explains everything you need to know about startups in this video.
1 Reason to be happy
You don’t need a villa in Ibiza. Just a reminder of how much you have…
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Have a great weekend,
Simone
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