OpinionSecrets of a company builder
Opinion
Secrets of a company builder
"Founders today have different needs and support mechanisms to ensure their efforts and time can lead to quick validation and reach their potential investors from a position of leverage," writes AnD Ventures founder Roy Geva Glasberg. "This is where the company builder approach comes in"
Building a startup has never been faster, more scalable and more accessible as it is today. But the demands from investors have become more stringent with a long list of requirements (“tick the boxes”) in order to “be worthy” of their investment - kind of funny to say but venture capital in the last couple of months is turning into capital with minimal venture. Valuations have dropped and investors are looking into minimizing risk, expecting the founders to come with international validation (mainly U.S.), and a significant ARR or user base. The mission of founders today is almost an impossible one.
Accelerators were built as a great product to reach an MVP, from concept to demo, from a story to a pitch deck, taking into account that these early-stage founders have the time and resilience to first learn and brush up their skills before they move to the investor hunting grounds. But how does that approach fit today’s climate? Well, simply put it doesn't. Founders today have different needs and need a different support mechanism to ensure their efforts and time can lead to quick validation and reach their potential investors from a position of leverage. This is where the company builder approach comes in.
Don't get me wrong, accelerators for many years dominated the startup realm. I spent over four years of trial and error building Google’s global accelerator programs. But even while still at Google I realized that the accelerator model has a few inherent limitations that left me feeling we were not able to provide the full support to the founders we set out to provide. These include:
Start date to end date
My job as a company builder is not just focused on choosing which startup to invest money in, but in addition, which founder and which team I want to work with and believe in to accomplish what they have set out to do. As a company builder I ask a very simple question - how do you know what you are building is really the product your customers need? What do you need to accomplish in order to validate that and what's the right way to do it? Now I love my job! I get to meet at least 30 founders a month and I am blown away with the level of maturity and sophistication I get to witness. Israeli founders don't miss out on an opportunity or a market failure, they come equipped with the notion that they can make a change and make a difference, and almost without fear they charge the global arena with their innovative thinking and nerve.
But choosing the right team to work with is just the beginning. After onboarding them we built an extensive plan to execute on together with one main OKR (sorry for the Google lingo:) which is a significant raise at a significant valuation. That objective is then broken down to the infamous investor box checking approach - how many users, customers, revenue, and geographic spread we need to accomplish that. How do we ensure our product serves the right needs and gives our users a great experience that addresses their emotions as well as their needs, and tackling the tech architecture’s ability to onboard and scale. Last comes the staffing and what talent is needed to add to the winning team. Yes, this costs money and we put money in but the focus is, and always will be, on giving these awesome founders a “co-founder”, they can count on to build and scale fast.
We expect our founders to innovate and build a new future, as investors and builders we truly believe we need to do the same.
Having a start and end date decided by the accelerator is a disadvantage for the startups because if they still need more help after the end date, they will have to go find more help elsewhere. The problem here is that the accelerator will never know how much time a company needs to participate in the program.
Changing the way accelerators operate
In general, startups benefit more from studios over accelerators because of the one-on-one approach and the vision that studios have for companies. Studios are there helping the founders build as if it was their own company, and founders want to have investors who are in it with them, which is a trait that accelerators do not and cannot provide.
As founders starting your way in turning your vision into a full blown and successful company, you should be mindful of three main things as you look for support in building it:
1. What you see today does not fully represent the challenges of tomorrow - hence who is there to support me now and, in their future, a month or a year from now, what skills they have, and what resources they can provide me with.
2. What is the valuation I am putting in place now - a million or two in early-stage valuation will be difficult to overcome as I continue to grow.
3. Is there a rainy-day financial capacity behind me? All early-stage investors (accelerators, incubators, angles etc.) know how to put in the 100k-200k check. What happens when I need the $1m+ and a fund to lead the round?
There is no substitution for founders’ vision, creativity and execution, but a good friend (team) with you will definitely make a difference and help you get there faster, and better, together.
Roy Geva Glasberg is the founder and managing partner of AnD-Ventures.
