How do you know if you have a Rocket? Many (most?) VC funded companies are just appearance, no substance and it’s all very apparent. All the new AI ‘products’ for instance. So those are clearly not rockets, just blah and hype. Maybe we had rockets before, but I don’t want to lie and cheat like some of our vc invested companies did (most are gone). Never were rockets, just hype, Twitter presence and faking all around.
To be honest, startups play on another level than most SMBs. With a SMB, you can double your growth every year for 5-10 years straight, and do very well, but not be interesting for VCs. To be interesting and relevant for VC money, you need a business that can scale to millions of users.
If you can show that you're able to double growth every month (or similar short-window metrics) with an idea that could scale to a billion dollar company, you'll get the interviews all right. Hype is a big part of growth.
The problem, so to speak, is that you'll be competing against other startups - and if you they have the VC money, but you don't, there's a good chance they'll outpace/outgrow you.
I think it's very noble to grow as much as you can organically - but realistically speaking, it's difficult to compete against those that are funded.
And you don't really need to use the money you get - being funded also comes with a signaling effect. You get lots of publicity, and get to signal that serious investors are willing to back you.
Actually you would be interesting for VCs if you started compounded from a reasonable start like $1m/year. Doubling for five years would get you to $32m/year, and 10 years to 1b/year, leading to a $10b valuation.
One common benchmark for startups at the $1m/year stage is T2D3 (triple, triple, double, double, double).
I believe it’s a pretty well-understood statistic that most VC-funded businesses are not successful, and the VCs are only successful because a small number of investments are massively profitable.
Neither VCs nor companies know for sure if they _will_ rocket. VCs are looking for businesses and founders who _could_ rocket.
That's indeed what I understand. And in that case, if you believe in your business, statistically, it's a much larger chance your dream will tank when going for a VC. Which does convince me, as I said, that people going for VCs, don't see this as something too important in their life, just something they try and see what happens. Can say whatever bad about Musk (and I do these days) be he seems to be (used to be?) different in that regard. Most would've just given up after a few years and few 100m$. And most do. The world changers won't hang their dream on a practical 15/1 VC.
It's not necessarily better to be one or the other, I just don't like people who work solely for the money. And people scamming VCs (who want to be scammed) are not people I choose to hang with, even though I met quite a few.
You know you have a rocket if you're leaving money/customers on the table because your cashflow doesn't support rate of fulfillment of potential growth.
