How Vcs Aren’T Arguing That Vc Funding Isn’T A Good Fit For All Serious Saas Founders

I’ve been raising my voice on LinkedIn for over a year to show how practical founders are successfully creating valuable software companies without big funding.

Do you know who isn’t arguing with me?

The many venture capital and private equity investors I know.

They all agree that big VC funding isn’t a good fit for most software companies and most founders.

I talk to seed-stage and early-stage software investors with big funds every week.

They AREN’T telling me I’m wrong. They see it too.

Good investors AREN’T telling you you’re not a real founder if you don’t raise VC funding. You just don’t fit their ROI math.

Bad investors play the ego game and look down on you if you aren’t raising big funding. Stay away from these investors. They are playing you.

Serious investors ARE telling me they have VERY SPECIFIC filters and criteria for the 1 or 2 or 3 software companies they invest in every year.

They tell me about the hundreds and hundreds of founders they talk to every year just to make an investment in maybe 1% of them.

They don’t think that VC funding is for every founder, for every startup, in every market, and in every region.

Neither do I.

I’m on the founder’s side here. I’m not selling funding.

The big-funding game is only useful to the few startups that can benefit by playing the very specific grow-fast game that is very likely to pay back the VC investors in a very specific way.

That’s when things go well. Which these investors know they mostly don’t.

VC and PE investors know the game they are playing when they invest.

They want founders to understand their game too and be completely clear about it.

But many (most?) new startup founders don’t understand the rare big-funding unicorn-hunting game that VC investors play, with a SAFE note to seed round to Series A, B, C, etc.

The only people that have ever argued with me are a few founders who are desperate for funding and expect funding to “just help them out because that’s what they need.”

That’s not how this game works. You don’t get funding because you have a good idea and you desperately need the money.

You get funding because you have proven you have a business that can grow big and you found an investment partner that believes in your growth plan and payback math.

Investors are just another customer.

If a founder won’t do the work to understand how to make their investor customer really happy, why would anyone think they understand how to serve a real customer?

Big VC investment math isn’t bad. It’s just not good for most founders and startups.

And it’s not as common as everyone thinks. But it’s the only thing that makes the news feed.

The odds FOR FOUNDERS don’t necessarily go up when you get funded.

Smart and savvy and experienced founders are growing companies without big funding. They are saying NO to big funding and it’s working just fine.

The first rule of the game is to understand the game you are playing.

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