A billion-dollar startup is called a “Unicorn.” There is a reason why it is named thus: the rarity of such startups.įor Mr. This is a meaningful reward if your company is valued at several billion dollars.

After several rounds of funding, the share of the founder is reduced to low 2 digits. We also find that many of the visionaries lose substantial ownership interest in those startups that get VC funding. It is late in the game when they realize that money is but one factor in the equation. If the VC says yes, then they have arrived. Every business idea (pitch deck) is geared towards how they can impress a VC. Companies have no courage to bootstrap these days. Reid and his mafia have brought an oversized importance for venture capital in entrepreneurship. Never mind that your product sucks and your customers are unhappy. So how do you keep adding more customers? Use the next rule: “You raise as much capital as possible:” That means capital becomes the primary driver of business. The market collapse of 2022 and its effect on VC funding clearly illustrate that : dominoes are collapsing all around us. But when the new investors stop you go bust. So long as you have new investors you are fine. If you keep your churn low, you are fine. The theory goes that you add more customers than the ones you lose. One of them being that you can ignore customers if it slows you down. And if you need to Blitzscale, there are certain rules that he puts forward. This is only good for a select few.īusinesses, he says, is like jumping off a cliff and assembling a plane while in freefall. But I do think they have made the whole business of building businesses a winner takes all game which can only be achieved with massive amounts of VC money. He and the “PayPal mafia” have fundamentally changed the way most of us think about building and scaling businesses.

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