“Yes” means “no”: The language of VCs

I played the VC game. We were attending every opportunity to give 10% of our business for $200K. No one would bite. Gradually, it felt it was easier to land customers than VCs. Then there came a moment that I wish for every founder. Our revenues started not only paying the bills, but also fueling growth. It felt as if a veil was lifted from my eyes. Now, it feels like all those pitches were a waste of time.

If you know marketing, you don't need VCs (unless you are in a capital-intensive business like rocket building). The problem is that most people who get funded are technical and do not know marketing and growing organically. However, there are lots of businesses that grow extremely well simply due to the cofounders having previous experience with marketing, often in a professional capacity.

My go-to example is Lemlist (and their "Lempire" of related products). The founders built their own cold email agency, grew that to millions just through sheer labor, then built software to automate that process and now they're at a 200 million dollar valuation from more than 10 to 15 million dollars in annual recurring revenue. They have lots of marketing channels: organic SEO via content marketing, Facebook group with frequent events like interviews with other agency owners and salespeople, YouTube videos that are then recut and repurposed to TikTok/Instagram/Facebook videos, partnering with influencers, paid advertising, and of course, cold messaging other salespeople and agencies via LinkedIn and email. Most technical founders do not know or have the patience to do any of this. If they do, though, they could similarly grow to such an ARR in a few short years, as Lemlist started only in 2018. Similar examples include GoHighLevel and ClickFunnels which are almost at or over a 1 billion dollar valuation each, both bootstrapped. The ClickFunnels founder for example sold his software via live demos (both webinars and in person events) where you got X% off but only if you booked right at the end of the demo, which apparently drove quite a high percentage of their initial sales.

I'd highly advise founders to start a marketing agency if only to understand marketing in a real capacity and how to deliver results to paying clients. I have done so via a cold email and paid ads agency for various niches before and I believe it's helped me immensely with future products. Best of all, you learn to be truly aligned with your customers and providing them direct value because they are paying you every month. If you make a mistake, you must fix it, you have no backup fund of venture capital previously raised in order to skate BY, especially now that ZIRP (zero-interest-rate phenomenon) is over.

And if you make your success public enough in the right circles? Those same VCs will be throwing their panties at you. It’s the game.

"Everyone wants investment from venture capitalists"

No they don't, why should anyone sane pay for working capital with equity. If all a VC brings to the table is cash, than they are functionally a bank loan with really terrible terms.

One can tell a bad idea when you have to explain its value proposition to people, at that point it is a vanity project already non-viable.

Rule #14: "Never outsource economic control structures, or one may end up indentured"

Depends - how much conviction do you have in the product you are building?