Can you assign the appropriate role? for your VC instead of being assigned a role By V.C.?
The answer could affect whether you build a unicorn and how much wealth you keep. Here's why:
· You can't build a unicorn if you don't have control over your venture. Her 94% of those who built unicorns maintained control.and
· If you don't take control, your value will be significantly diluted – In a sample of $22 billion entrepreneurs, those who delayed VC saw less wealth created than those who took VC early. The ratio has more than doubled. VC avoiders keep 7x (VC about truth).
In addition to thinking about whether to look for a VC, whether to acquire a VC, and who is the best VC for you and your venture, you probably need to ask yourself: What is the best fit for my VC? What is the role? Here are three major VC roles to help you decide which VC role is best for you.
#1. VC as a controller
The “classic” VC role is Silicon Valley-style, especially the top 20 VCs, all of whom are based in Silicon Valley or have offices in Silicon Valley. Andy Rachleff, formerly of Benchmark Partners and of eBay fame, pointed out that top VCs fund after the value model (which is the case with strategy) and before the growth model (which is the case with leadership). At this stage, VCs can get better value and reasonable risk. Also, new investors who are expected to take control of a venture, invest significant capital to help the venture get off the ground, and lead the venture into a profitable strategic sale or divestiture. You can also find CEOs (usually successful entrepreneurs or business executives). IPO.
· eBay is a prime example of this model and one of Benchmark Partners' great successes. They invested his $6.7 million, hired a new CEO, and harvested about $5 billion in about 18 months.
· Apple is a less successful example of the VC model. Jobs was fired, and multiple CEOs after him failed to stop Apple from sliding toward bankruptcy. Jobs returned and with capital from Bill Gates returned Apple to the top of the business world.
#2. VC as a mentor
A VC can also act as a guide, especially if the entrepreneur is young and inexperienced. In such cases, entrepreneurs can benefit from the experience of successful mentors. VCs may sit on the board of directors as mentors and advise entrepreneurs. However, previously successful entrepreneurs are often considered better mentors and advisors than venture capitalists. Bill Gates didn't need venture capital, but he needed a guide to investing in ventures. So he got a VC who would invest in him once it got off the ground.
#3. VC as an arms dealer
This model helps entrepreneurs after they launch their venture and get it off the ground. However, other ventures and venture capital may enter the field, so capital may be needed for the venture to take control. Entrepreneurs retain control and use VCs primarily for the capital they provide.
· Michael Bloomberg was a successful Wall Street executive when he founded his company. He acquired Merrill Lynch as his first client and strategic investor and went on to dominate the industry.
· Amazon.com's Jeff Bezos used family and angel capital to take off without VC. When his sales jumped from about $500,000 to more than $15 million, and the next year he was on track to reach $148 million, he hired John Doerr from Kleiner Perkins to build the Internet giant. I got funding.
· However, VC as an arms dealer is not a foolproof strategy. WeWork tried a capital-intensive strategy, investing a huge amount of money from Masayoshi Son and others. It didn't work out for him.
The right VC role for you and your venture
Determining the optimal role of VC in your venture involves determining whether you need VC, when you need it, how much money to acquire, what you want to accomplish with the VC you acquire, whether you want to maintain control, and how much. Determine how much VC you want to get. Do you want to keep the wealth created? Most importantly, you need to know whether you want to learn the skills to build and manage a growth venture or whether you want to take the risk of a venture based on your intuition. Consider:
· Your stage: If you want to stay in control, delay until Leadership Aha.
· Needs: If you want to reduce dilution, reduce your VC needs.
· Goals: If you want the best VC, set unicorn goals. And if you want to keep more of the wealth you create, stay in control.
· Your skills: Learn unicorn startup, launch, and leadership skills to achieve your goals.
· Proof: Like Mark Zuckerberg, prove that you can cause FOMO (fear of missing out).
My take: If needed, the best VC role is as a VC in the top 20 VCs as an arms dealer. To do so, you need to prove your venture's unicorn potential and leadership potential.
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