
How to raise money: it’s a journey not an event - weinzierl
https://steveblank.com/2020/02/26/how-to-raise-money-its-a-journey-not-an-event/
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toohotatopic
Looking at those numbers, it seems like VC focus exclusively on high risk -
high reward companies. What do the businesses do that have less risk and less
reward but where a portfolio of these companies can make the same average
profits?

I am thinking of the Ben and Jerrys [1] kind of businesses. Apart from getting
loans, is there a way for them to rise money?

[1] [https://www.joelonsoftware.com/2000/05/12/strategy-
letter-i-...](https://www.joelonsoftware.com/2000/05/12/strategy-letter-i-ben-
and-jerrys-vs-amazon/)

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alexheikel
If you don’t take high risk you can’t have high returns.

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EGreg
Why not? You can have a lot of “potential energy” stored up and make sure you
don’t fail because you have endless opportunities to try high-return ventures.

This happens because software has near-zero marginal cost to copy.

Take for example
[https://worldaftercapital.com](https://worldaftercapital.com) written by a VC

Or [https://qbix.com/token](https://qbix.com/token) ecosystem which aims to
achieve a new economic model for open source projects

~~~
adventured
I agree with this skepticism. There is no strict link between high risk and
high return.

Microsoft was not high risk (as noted by Gates), and it provided a return that
is so large it might as well be off the scale for the purposes of this
discussion (their market cap was recently up around $1.3 trillion; Gates will
have pulled over a hundred billion dollars out of his ownership in the company
over ~45-50 years).

\- Microsoft had very high margins from the beginning. They operated thin and
were very cash rich within the first few years. Just a few years in, Gates had
Microsoft hoarding multiple $500,000 government bonds (~$1.5m in today's
money) from accumulated profit, because they were already very profitable
(there is a story about the secretary misplacing one of these bonds).

\- Microsoft was founded for relatively little money - $10,000 - and with zero
outside VC money. Gates & Allen came up with that capital from working various
industry jobs in the prior years.

\- They nailed down a serious customer (MITS) and then founded a company,
rather than the other way around (found a company and then try to find
business for it).

\- Sales went from $16,000 in 1976 (first months of operation), to $8m for
1980, and $17m in 1981 with 40 employees ($17m is $50m inflation adjusted).
Three years in they were gushing cash.

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gentleman11
Does anyone have experience seeking funding from games publishers? How
similar/different is it from VC fundraising?

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bluetwo
I've never heard of that. Interesting. Is that a thing?

