One of the most significant features of The Accelerator, Metavallon’s intensive 5-month startup acceleration program, is the allocation of over 40.000 Euros in value to each participating team. From this amount, 25.000 Euros will be a financial investment from Odyssey Venture Partners and 15.000 Euros correspond to perks and services. So why is it important for early stage startups, particularly in Greece, to be backed by venture capital?
1. Grow competitively fast
This may be more or less obvious: early stage startups that receive investment can surely reach their goals quicker compared to others, which lack income sources. In fact, funded teams can employ talent, either full-time or on a project-basis, and also use valuable services that are not offered for free (such as marketing and advanced analytics). This allows funded teams to speed up their work, reach milestones much quicker, and evolve faster towards the most efficient business model.
2. Focus on the project completely and reach full potential
Of course, the ability to spend money on resources is one side of funding; the other even more critical is the opportunity for the founders to dedicate themselves fully. Indeed, founders with VC-backed startups have sufficient income to rely on and full dedication is not simply encouraged but absolutely essential. This is the only way they can actually focus on what they are doing and apply the time, energy, and work required to succeed. An idea may need 20% of your time and attention, a startup needs leastwise 120%.
3. Build up revenue streams instead of just profits
A common mistake that a lot of startups make is that, initially, they focus on any way possible to make a profit, rather than on developing a strategic and sustainable revenue model, which will set the foundations for the future. This of course has to do with the previous point: the time and resources available to be spent on investigating, testing, and refining revenue streams, as well as the flexibility to focus on boosting the user base (which is usually slowed much when seeking profits). Indeed, enjoying a VC investment can help founders work towards high long-term revenues and not simply short-term and short-lived profits. After all, as Warren Buffett said once: “Games are won by players who focus on the playing field –- not by those whose eyes are glued to the scoreboard.”
4. Harness top level mentorship
Venture capitalists are not the kind of investors who spend their time by their swimming pool while skimming through spreadsheets for their pastime. They are highly experienced and active business facilitators, who want and strive for their investments to flourish as much and as quickly as possible. They have a wealth of expertise, insights, and guidance to offer to the startups they work with, on all levels of business – from operations and marketing, to financial and negotiations. And the access to such an intellectual resource is both invaluable for rapid growth and a strong advantage within a competitive global market.