Anyone who thinks that all this data is pertinent to make the investment decision will most likely never say yes to any startup.
Yup, this exactly. MAYBE your team matters depending on who you are talking with, but if some VC gets a whiff that you have 2MM users, are growing 5x MOM for the past 6 months with 1% churn and high engagement they will literally hunt you down to throw their money at you.
> What’s the difference between a great idea, and a early-stage VC-fundable business?
Well, an early-stage business in my mind is a business that has some kind of product or service already built or at least a prototype.
But hopefully they already have customers.
> If the customer base grows, then you suddenly need to build a company that can support that growth — an executive team of leaders and an organization that can operate and adapt effectively without the founder driving every decision.
In my mind I want to build a company with as little employees as possible with as much profits as possible. Is the way to do that really by employing an "executive team of leaders"? Isn't it just better to hire people that are productive and don't really need supervision in order to get things done?
Later on the author writes about an IPO, which is something that feels so far from the initial founding stage that it is useless to think about?
I wouldn't want to build a company if the only goal is to complete an IPO as soon as possible but maybe that's just me.
There's nothing wrong with building a company the way you're describing. In fact, it's the one most founders should take.
Raising even a Series A basically sets a company on the path of IPO or bust. Just don't raise VC and you can do exactly what you want.
But to respond to your other questions...
>Is the way to do that really by employing an "executive team of leaders"?
Yes. Many founders can't delegate and end up obsessively micromanaging others which puts a ceiling on growth.[1]
>he author writes about an IPO, which is something that feels so far from the initial founding stage that it is useless to think about?
The IPO thinking at the very early stage isn't necessarily premature because the founders may make early decision to offer equity (stock options) to employee #2 instead of a higher market salary. (Because they have no money to pay high salaries.) If so, they've basically chosen the fork in the road towards an IPO. If the employee can't eventually sell the stock (liquidity provided by IPO), there isn't much point to offering equity.
Of course VCs want you to believe that an IPO is the only successful exit, because they want moonshots. But as a founder you need to keep your own council as to the wisdom of pursuing growth at all costs.
I give up the big profit, I only care about "not caring for employees"
For many other businesses, a loan or swear equity is more appropriate.
I think we forget that a restaurant can be a great idea. It only makes sense for a restaurant to be an "early-stage VC-fundable business" if it's going to turn into a huuuuuuge chain.
But more importantly, the story of McDonald's rings true: McDonald's founder didn't do the work of expanding the chain.
In the VC world, a successful investment has a 10x return on the investment. A great idea may turn into a great small business with organic growth. It can provide for a career without needing VC investment! This can be a small group of consultants, or someone who builds an SAAS business.
(Edit) But, the thing about restaurant vs tech is that there's plenty of room for 1000's of small burger joints to co-exist with McDonald's. It's a lot harder for 1000s of "Joe's Git hosting" to co-exist with Github. Thus, it's often harder to see how a "great idea" in tech can turn into a small no-VC business.
A theory of mine is that really what we're seeing is a change in attitude about corporate governance and business building as the VC money from outside the SV bubble becomes increasingly relevant.
Discussion of founder-friendliness recently seem to back that up in my mind. If FF attitude is going away, it is because of declining influence of the SV venture crowd controlling the narrative about their own special sauce and the right way™ to form a company.
Increasing diversity of LPs and VCs from outside SV are bound to have an effect on the attitudes toward companies being founded. Posts like this seem like justifications for existing behaviors, rather than a playbook based on any evidentiary burden.
You get to yes by already being pretty successful, or for complicated subjective reasons that add up to apparent promise.
