When 9 out of 10 startups fail after most don’t even raise the capital they need, and 75% of VC funds don’t meet their investment objectives, its time for a rethink.
Traditional angel, seed and venture capital investment models aren’t working. Not for the investors, not for the business owners, not for the employees, most of the time.
Demo days where there are no actual prototypes demo’ed and the traditional stand up routine of Shark Tank style pitches, mostly to other people pitching is failing everyone in the industry.
Why? Because they focus on the startup or scale-up in isolation, instead of tackling the job of creating the collaborative ecology around the startup
It’s time to move from startups and scale-ups to raiseups.
What is a Raiseup? Think of a barn raising. That traditional, collaborative and community activity has its equivalent in many cultures around the world. Many people came together to help a neighbour build their barn their house, their extension, knowing full well that when their time came, those neighbour would be there to return the favour. They didn’t pitch in a group of 10 to find one investor to help build one barn while the other 9 failed.
But when you’re in a traditional startup or VC funded accelerator or incubator, you’re fighting over limited resources, often in a walled garden created by the founders. You may even be in a sector specialist fund or accelerator digging over the same customers and markets in the same industry and even within the same business and geographic location.
You may find a sympathetic ear or some sage advice, which aren’t to be sniffed at. But there is almost no room for creating your own unique and true collaboration space, no matter how hard you try. That’s why only a small number succeed, because they break out of the pack. There is little or no opportunity for the multiplier effect of cashflow to pass to other startups in the traditional model because most of the invested cash simply flows through the startups and out.
With these startups and scale-ups, the money flows in and through each of the businesses individually. It mostly goes to salaries, rent and external suppliers. And when a startup fails, the IP is almost always lost.
It doesn’t need to be this way.
Raiseups Australia is a new virtual accelerator programme, based on the award winning and world’s best practice Blue Ocean Shift approach to entrepreneurship.
Watch this space and we roll out a new way for entrepreneurs and investors to succeed together through the collaborative creation of new and uncontested market space.