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One thing I’ve been thinking deeply about lately is the concept of risk in tech companies.
Here’s a
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🧵" title="Thread" aria-label="Emoji: Thread"> on why I think there’s a huge opportunity that both the regular banks and traditional tech investors are missing, and why @tractorventures was started.
How risky are startups?
Here’s a
How risky are startups?
We all know the old adage, 80-90% of technology company fail. Startups are hard. They’re super risky.
The problems with these statements is they’re generalisations, and the second part of these statements is often overlooked and left off.
The whole statement actually says …
The problems with these statements is they’re generalisations, and the second part of these statements is often overlooked and left off.
The whole statement actually says …
When optimising for a huge outcome for investors, startups are risky and mostly fail.
So for a very narrow definition of success, the statement is true.
What happens if we widen the view on that definition?
So for a very narrow definition of success, the statement is true.
What happens if we widen the view on that definition?
We’ve been talking to all kinds of folks around the world who back technology founders who are seeking to build reliable, steady growth businesses that have sticky, happy customers.
These businesses are not lifestyle or small businesses. They’re scalable and exciting however …
These businesses are not lifestyle or small businesses. They’re scalable and exciting however …
The *need* to grow at rates that create crazy returns for investors is not there.
These founders are ambitious, but they’re not willing to put their companies into a binary state of success, either at all, or yet.
These founders are ambitious, but they’re not willing to put their companies into a binary state of success, either at all, or yet.
Our research suggests that if you’re angel backed, or bootstrapped and get to $50k a month in revenue and have a clear eye on your cost structure then success and growth is almost given.
These are great businesses with low churn, happy staff and customers.
These are great businesses with low churn, happy staff and customers.
The interesting common theme here is that other people *do* want to buy shares in these companies but the founders don’t need to sell them.
Being very conscious of this is something all founders should be aware of.
Being very conscious of this is something all founders should be aware of.
For the same reason investors love investing in tech companies, their relatively low capital needs compared to large returns, founders should optimise to retain their shares for as long as possible.
The impact these businesses can have on their founders is profound, the reason they don’t get the limelight is there isn’t a roster of external shareholders that mint themselves and get TechCrunch articles written.
We’re meeting them daily, and really enjoy their company.
We’re meeting them daily, and really enjoy their company.
And the irony? Given some time, the right support and some aligned capital the chances of a https://abs.twimg.com/emoji/v2/... draggable="false" alt="🚜" title="Traktor" aria-label="Emoji: Traktor"> turning into a https://abs.twimg.com/emoji/v2/... draggable="false" alt="🚀" title="Rakete" aria-label="Emoji: Rakete"> is not zero, but only if the founder wants to.
Either way, we’re here to help.
2 min application process & funds in a week https://www.tractorventures.com/apply ">https://www.tractorventures.com/apply&quo...
Either way, we’re here to help.
2 min application process & funds in a week https://www.tractorventures.com/apply ">https://www.tractorventures.com/apply&quo...
