Venture Path
Background
As a founder, one of the most critical decisions you'll face is how to scale your company. Your options include:
The venture path: chasing rapid growth with venture capital;
Sustainable growth (with funding): balancing scale and stability with external support; or
Sustainable growth (founder-funded): building value over time on your own terms.
In this post, we'll explore the venture path and the trade-offs you’ll encounter. Curious about sustainable growth? Check out the Sustainable Growth path for more on that approach.
The Venture Path
The Venture Capital (VC) path involves startups raising capital from venture investors, who provide funding in exchange for equity. The objective? Scale rapidly and dominate the market.
This path typically unfolds through multiple funding rounds: seed investment, followed by Series A, B, C, and beyond, often called “growth” rounds after Series B.
Companies on the venture path typically aim to at least double their valuation with each round. When it’s working, they chase aggressive growth targets like T2D3 (tripling revenue twice, then doubling it three times), aiming for $100M+ in high-quality revenue.
This approach is aggressive because it prioritises speed and scale over short-term profits. It’s a great fit for startups with great product-market fit, a strong team and a massive market to conquer, but for many founders, sustainable growth offers a safer bet.
VCs take significant risk, and so they expect big rewards at exit, usually via an IPO or a high-value acquisition. Want to dive deeper into exits? Have a look at my post on A First-Class Exit.
When Does the Venture Path Fit?
Venture funding might be right if:
Your idea has massive, scalable potential.
You’re okay with high risk and investor input.
You’re targeting fast growth and a $1B+ valuation over time.
VCs are looking for startups that can deliver exponential growth, as their portfolios usually follow the power law (where a small number of investments drive the majority of returns). If your startup could become a category leader in a meaningful market, the venture path might be a strong fit.
Venture Path: Trade-Offs
| Benefit | Consideration |
|---|---|
| Speed | Rapid scaling and market dominance. |
| Funding | Big capital, but you give up meaningful equity. |
| Risk | High stakes: big wins or big losses. |
| Control | Investors share strategic decisions. |
| Endgame | Exit (IPO or acquisition) is expected after a few years. |
Venture Path or Sustainable Growth?
The venture path is like rocket fuel for growth: fast, high-stakes, and thrilling. But it’s not for everyone. VCs usually only invest in around 1 out of every 100 opportunities they look at.
If you’re weighing your options, explore my post on Sustainable Growth to see if it’s a better fit for your startup.