or Why I’m Investing Bitcoin in Someone’s Crazy Dream!
I recently announced, as part of my book launch for Treasure Hunt: Follow Your Inner Clues To Find True Success, that I will be investing $20,000 in Bitcoin (or legacy cash!) in one contestant’s business idea. I’m particularly looking for non VC-backable projects. More details at www.zenentrepreneur.com/contest.
The Problem with VCs and Most Entrepreneurs
I speak with a lot of entrepreneurs and potential entrepreneurs. This is partly because of my writing, and partly because of my work with startups. Because I live and work in both Silicon Valley and at MIT, many of these entrepreneurs try to raise money for their business idea from angel investors and venture capitalists (“VC’s”).
The biggest complaint I usually get from entrepreneurs is that VC’s won’t invest in their company because it’s not a “big enough market” or it’s not a “VC-scale business”. Anyone who goes down this road is likely to be frustrated because the investor doesn’t think it could be a billion dollar business a few years down the road.
Of course, when I talk to VC’s this is often the reason they decided to pass on doing an investment — because it is not “big enough”
This leaves both sides frustrated.
The entrepreneur is right in the sense that that when most businesses start, the market isn’t at all clear … so it’s almost impossible to predict whether a market will become big enough or not. VC’s are wrong after all, much more than they are right (since most VC-backed businesses fail), so they aren’t a very good judge.
A different kind of business investment
On the other hand, the VCs are right in that not all businesses can provide venture-scale returns — and nor should they!
I’ve met lots of entrepreneurs with ideas for businesses which, when launched, could meet a very specific need in the marketplace, but are not “traditional” “new-tech” businesses. Therefore they don’t lend themselves well to the normal Silicon Valley model — raise a seed round, then millions in VC, scale the users (or revenue) to a certain point, raise a series B, and then sell out to a bigger company or go public (usually without any profits).
This might include services businesses, retail businesses, many types of creative products, mission-oriented projects, entertainment, or just crazy ideas that no one knows will work. Moreover, some businesses just require a little bit of capital to get started and don’t require VC-type investment.
So where should these entrepreneurs go? A first answer is talk to angel investors. While this works to an extent, many angel investors these days are hoping to put their money into the next Facebook,so they look for businesses that VCs will back in the next round. The Bank? A common answer is to go to a bank and get a loan, but this is even more problematic. Most banks won’t lend based on an idea without collateral and require personal guarantees.
Every Startup is Treasure Hunt
Finally, as part of my new book, Treasure Hunt, many people want to follow their gut and the “clues” that are being laid out for them to pursue a small business or creative idea, and neither banks or VC investors are appropriate.
Many startups — VC-backed and non VC-backed — often go to places they didn’t expect. Microsoft started off building developer tools, not operating systems. Both Slack and Discord, two very well known chat applications, started off as game companies and then found themselves.
In my program, Play Labs @ MIT, I often compare starting a company with a good Treasure Hunt - like an Indiana Jones film. In these films, it would be nice for our protagonist (Indy) if the treasure map was laid out in front of him and all he had to do was to go retrieve the Ark of the Covenant (or other artifact). But that wouldn’t make for a very interesting movie would it? Instead, he follows the first clue, and this leads too … the second clue!
The reality is that most entrepreneurs are following a thread of some idea that they have seen in their mind’s eye, and that thread can lead many different places. Like Indiana Jones, most entrepreneurs have to “follow the clues” one by one to get to the treasure. The clues in this case may be based on intuition, hunches, gut feelings, pattern recognition or something entirely undefined.
The Real Life Treasure Hunt — Win $20,000 in Bitcoin (or Legacy Cash)
I’m offering this new contest for those with ideas that are non-traditional for VC’s — this could be a film project, a retail venture, a services company, an app for a niche market, or something completely out there — a prototype for an electro-gravitics-based spaceship, a bitcoin mining service — you name it!
I’m offering one lucky winner an investment of $20,000 in Bitcoin (or Cash) to pursue their idea. As in the popular show Shark Tank, I’ll interview the finalists and give at least one of them an offer to invest in their company for a negotiated percentage. To be eligible, you have to not just buy but actually read a copy of Treasure Hunt. More details are here — the contest kicks off on October 17: www.zenentrepreneur.com/contest
I’m doing this because I believe there are many great ideas and entrepreneurs out here whom the traditional venture capitalists in Silicon Valley don’t serve very well.
If you have followed your own clues to build the project that’s calling to you — particularly if it’s a life-long calling and you just need some capital to get started — please enter the contest and I may be able to join you in this journey!