The reality check for aspiring founders: is the VC route right for you?

I've encountered countless founders with grand visions and dreams of building the next big thing. However, a common pattern I've observed is the fading enthusiasm once they hit a certain milestone, often around the €1M revenue mark. This shift in mindset brings up an essential question for founders: How big do you want your venture to be, and is the VC-funded path the right one for you?

Hitting significant revenue milestones can sometimes lead to a change in perspective. Founders often start to weigh the risks and responsibilities that come with scaling up. It's at this juncture that the initial drive can wane, and the reality of what it takes to build a large-scale venture sets in.

Understanding your ambitions and limitations:

1. Personal goals vs. Business goals: Founders must introspect and align their personal goals with their business ambitions. If the aim is to build a lifestyle business that offers stability and satisfaction on a smaller scale, the high-growth, high-risk VC path might not be suitable.
2. The commitment to scale: VC funding is not just about getting financial backing; it comes with the expectation of rapid growth and significant returns. Founders need to be prepared for the long haul, which often means intense workloads, high-stakes decision-making, and a constant push for growth.

The VC perspective:

1. Growth expectations: As VCs, we're looking for businesses that have the potential to scale massively. We invest in companies that show promise for significant market disruption and high returns.
2. The fit for VC funding: Not every successful business is a fit for VC funding. Founders need to evaluate whether their business model, market potential, and personal aspirations align with what VCs seek.

Navigating the decision:

1. Realistic self-assessment: Founders should honestly assess their appetite for risk, commitment to aggressive growth, and personal vision for their business's future.
2. Seeking the right funding route: If a founder's vision is more aligned with steady, manageable growth, other funding options like bootstrapping, bank loans, or angel investors might be more appropriate.

Conclusion

Dreaming big is the essence of entrepreneurship, but it's equally important to be realistic about the path you choose. For founders at the crossroads, the decision to pursue VC funding should be made with a clear understanding of the demands and expectations that come with it. Remember, building a successful business doesn't always mean taking the VC route; it means taking the route that aligns best with your vision and goals.