When I first talked about the 1M/1M program, I had observed the need to contain the immense infant entrepreneur mortality prevalent in the startup ecosystem. Over the past year, we have been talking to various investors – VCs and angels, and incubators and accelerators – asking them the question: What are you doing with your rejects?
To give you some further context, we recently spoke with a VC in Boise, Idaho, who gets 500 deals a year. His firm invests in four. That means that less than 1% of the entrepreneurs who apply succeed in getting financed. If you look at the numbers of super angels in Silicon Valley, they are even more scary. Mike Maples told us that he gets 7,000 deals a year and invests in 12 to 15. That’s a 0.21% hit rate. The flip side: a 99.79% rejection rate.
Friends in the investment ecosystem, this is the most obvious opportunity for us to address through 1M/1M and make a dent in infant entrepreneur mortality.
I sincerely request you to refer your rejects to 1M/1M. Please use this landing page: Over 99% of Startups Face Investor Rejection. Let’s work on them, and we will refer the ones that plug the gaps and look like fundable deals back to you. Those that are not fundable may still have premises upon which sustainable bootstrapped businesses can be built. And for those that are bad ideas altogether, we will work with the entrepreneurs and help them screen out those ideas and develop better ones worth their time.
As my friend Brian Jacobs at Emergence Partners said the other day, “This would simply be good customer service for me to provide a constructive solution to those entrepreneurs I reject.”
And my friend Gus Tai at Trinity Ventures said, “I’d like to invest more in human relationships, so that even if I reject a particular business deal, it would give me a way to preserve a positive, long-term relationship with the entrepreneur.”
You see, the entire startup ecosystem is structured to look for and invest in the less than 1% of the entrepreneurs who are ‘ready’ and ‘fundable.’ I have deliberately structured 1M/1M to be able to work with a broader set, and empower the other 99%+ .
It is my firm belief that the global economic system will perform significantly better if we can help this other 99% perform better.
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