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Should You Raise Venture Capital? (Statistically Not.)

  • Venture capital is a high-risk asset class designed for companies with exponential potential and rapid growth.
  • VC is a power law business where a few successful investments can outweigh numerous failures.
  • Startups must offer a credible path to 10x returns for VC investment, focusing on real speed, defensibility, and timing.
  • Science-based companies with clear market endgames are better suited for VC than shiny apps and are often funded by public money before turning to VC.
  • Successful startups often capitalize on macro shifts like technological advancements to become VC-suitable.
  • Some startups succeed not by inventing something new but by moving quickly in response to changing conditions.
  • VC investment should align with businesses that require rapid growth and can benefit from VC resources, unlike businesses that can grow profitably on their own.
  • The decision to raise VC funding should be made after considering the alignment with the business model and potential downsides.

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