I am a big fan of Rand Fishkin, founder of Moz and now Sparktoro, not only for what he built at Moz but primarily because of his openness in sharing his experiences and learnings. His recent book, “Lost and Founder” is a great read and an example of candidness, warts and all. Very few books bring that to the table.
One of the points that Rand talks about at length in his article for Atrium, a law firm for startups, is the misrepresentation of data with reference to the efficacy of VC funding. There are a few like Sramana Mitra who have been talking tirelessly about bootstrapping for a long time, but these 3 ( well known ) facts are worth pondering about :
- Founders have a <10% chance of earning more money through their startup, compared to taking a senior position at an established company
- 75% of venture-backed companies fail
- 1/167 startups reach $10M revenue”
The simple fact that a small funding raise is news worthy and consistently profitable and successful businesses are not, is also something that skews our views.
I am sure there are a lot of contra views out there. It would be nice to hear them. With the world focused on Startups, what is your take?
Link to article: https://www.atrium.co/blog/reconsider-vc-funding/
Link to book: https://amzn.to/2RI2O7W
Link to Fast Company (quoted by Rand in the article) on Why Most Venture-Backed Companies Fail : https://www.fastcompany.com/3003827/why-most-venture-backed-companies-fail