Everyone loves to hear a juicy story about some hot new company’s latest multimillion-dollar fundraise.
In Silicon Valley and beyond, it’s become common to only equate “serious” entrepreneurship with gobs of venture capital. If a company isn’t funded, it must be a lifestyle business. (Generally, lifestyle businesses are ones the founders don’t dedicate their entire lives to; you won’t see them working intense 70-hour work weeks because they see their company as a smaller aspect of their lives. This isn’t inherently a bad thing, but people in the industry often misuse it to demeaningly refer to the easy path.)
Venture capital isn’t the only way to fund a business, and for many early-stage startups, it’s actually the worst way, he writes. The majority of entrepreneurs across the U.S. don’t need funding. Getting a startup off the ground costs less these days, and a small team with the right product can bootstrap its way to success without ever raising capital.
We need to stop fetishizing the most recent massive funding round, he says, and recognise that just because a company isn’t hitting up Andreessen Horowitz doesn’t mean the founders aren’t working just as hard. Just because a business is small, doesn’t mean it’s a lifestyle business.
“The profitable seventeen-person company with an enterprise value of $US20 million, 90% owned by its founder?” Walker writes, “That’s awesome even if you’ll never read about them in TechCrunch.”