Build Your Company For You And Your Employees, Not Venture Capitalists

Build Your Company For You And Your Employees, Not Venture Capitalists


There are two types of companies in America. First, there are those that are designed and structured from the very beginning to be sold and sold quickly. Let’s call them the meteors. Second, there are the “real” companies. These companies represent the vast majority of successful businesses in the U.S., and typically take years to grow into profitable, sustainable enterprises.

It is a great irony of entrepreneurship that VCs are rarely, if ever, interested in real companies – those that require time, blood, sweat and tears to grow. You know the ones I’m talking about: your company, your sister’s company, your dad’s company. Instead, VCs spend their time chasing the meteors, hoping for that big win, that lottery ticket. They want to invest in companies that they can sell or take public in as short a time as possible, usually within a five-year window.

So, which of these companies are for you? Are you building your company for VCs, or are you building it to last?

Every entrepreneur eventually has a moment of reckoning when they have to decide which of these two types of companies they want to build. One of the first conversations every entrepreneur should have with him or herself is whether or not the goal is to become a VC-backed golden child. The sooner you make this decision, the sooner you know what game you’re playing. Are you looking to “pump and dump,” or are you thinking longer term, seeking to build a company that may take five years to generate real revenue, another five years to become profitable and another ten years to really scale? Either choice is valid but they each have their own playbook and you can’t mix and match them.



Honestly, who wouldn’t want to be a VC-backed golden child? Lots of cash, well-known and connected board members, cool offices, unlimited beer and ping pong, the list goes on and on. But as with all things in life, being a golden child comes with all kinds of strings and constraints. For some insights into the whole fundraising process, check out this primer from one of the most well-known Silicon Valley VCs.

This brings me to the second, and possibly the most important, conversation an entrepreneur needs to have with him or herself. Regardless of which type of company you think you want to build, the real question to ask is: is my idea a VC-fundable idea? Is this a business with protectable intellectual property that can grow at more than 100% year over year for five straight years in a really large addressable market? Because if it isn’t, VCs have no love for you. In the off chance that they do, you probably don’t want their money anyway. The milestones they’ll want you to hit will be so crazy, it will probably drive you to drink.

So, having this conversation with yourself as soon as possible will undoubtedly save you countless hours of pitching to VCs who don’t care about you and will just make you feel bad about yourself. Moreover, if you’re not really a VC-fundable company, taking VC money is often a recipe for disaster, which in many cases will leave you worse off than if you had taken the long road in the first place. To be fair, there are some truly successful world-changing companies (Google, Facebook, AOL, eBay) that were VC funded. But these are certainly the exception and not the rule and trying to do it the way they did it is very much akin to winning the lottery. This is not the experience of the vast majority of entrepreneurs and getting comfortable with this realization will help you focus on the long road ahead.

Now, for the good news… Relax. Be happy. You didn’t need that VC money in the first place. For many of us, isn’t it really about the validation anyway? We just want to say we got so and so VC as investors, and so and so is on our board. Are you really ready for that money? Do you have product/market fit? Are you really ready to scale? The long road is not so bad. It most likely means that you have real customers and you’re doing the hard work to build a real company, that will grow at sustainable rates year over year, will generate real profits (fancy that!) and will support you, your family and your employees for years to come.

I started my company, Torsh, four years ago and it became clear to me pretty quickly which kind of company I wanted to build. When it’s time for me to go kindly into the good night, I want to say to my kids, “Your dad built a great company that not only improved the lives of people the world over but also provided a good living to hundreds, maybe thousands, of others.” I am in this for the long haul and I know that you are too.

So, in those moments of doubt, when you’re knocking on the umpteenth customer door and you get that email from your buddy that says that he raised millions of dollars from so and so VC, know that you’re on the right path. And although the road may be long, you’re building a real business for you and your employees and not for so and so VC.

Courtney Williams is the CEO and founder of Torsh.


October 1, 2016 / by / in , , , ,

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