[staticelf]

I don't understand.

> What’s the difference between a great idea, and a early-stage VC-fundable business?

Well, an early-stage business in my mind is a business that has some kind of product or service already built or at least a prototype.

But hopefully they already have customers.

> If the customer base grows, then you suddenly need to build a company that can support that growth — an executive team of leaders and an organization that can operate and adapt effectively without the founder driving every decision.

In my mind I want to build a company with as little employees as possible with as much profits as possible. Is the way to do that really by employing an "executive team of leaders"? Isn't it just better to hire people that are productive and don't really need supervision in order to get things done?

Later on the author writes about an IPO, which is something that feels so far from the initial founding stage that it is useless to think about?

I wouldn't want to build a company if the only goal is to complete an IPO as soon as possible but maybe that's just me.

[codingdave]

VCs aren't trying to build companies. They are trying to use companies as tools to get themselves big exits. There is a big difference.

[andygcook]

The author is a VC and the article is written from the lens of how to pitch a VC.

There's nothing wrong with building a company the way you're describing. In fact, it's the one most founders should take.

Raising even a Series A basically sets a company on the path of IPO or bust. Just don't raise VC and you can do exactly what you want.

[jasode]

As others already mentioned, it sounds like your preference is building a bootstrapped company from day one without need for any VC funding. You're not the intended audience for the author's blog post.

But to respond to your other questions...

>Is the way to do that really by employing an "executive team of leaders"?

Yes. Many founders can't delegate and end up obsessively micromanaging others which puts a ceiling on growth.[1]

>he author writes about an IPO, which is something that feels so far from the initial founding stage that it is useless to think about?

The IPO thinking at the very early stage isn't necessarily premature because the founders may make early decision to offer equity (stock options) to employee #2 instead of a higher market salary. (Because they have no money to pay high salaries.) If so, they've basically chosen the fork in the road towards an IPO. If the employee can't eventually sell the stock (liquidity provided by IPO), there isn't much point to offering equity.

[1] https://en.wikipedia.org/wiki/Founder%27s_syndrome

[dasil003]

Offering equity is nothing more than giving a stake in the company. An IPO is only one way that can pay off, and these days probably not even the most likely.

Of course VCs want you to believe that an IPO is the only successful exit, because they want moonshots. But as a founder you need to keep your own council as to the wisdom of pursuing growth at all costs.

[jasode]

>Of course VCs want you to believe that an IPO is the only successful exit,

Yes IPO is not the only way. VCs will also consider an acquisition by Google/Facebook/Microsoft/Amazon at a good price to be a "successful exit" and will explicitly go over those possible scenarios with the founder.

But there are other motives behind exploring the acquisition scenarios:

1) VC is actually asking in a more roundabout way if the founder has an answer for the above giants cloning the feature and rendering his startup obsolete

2) VC wants to gauge founders' openness to sell to earliest buyer or has plans to stick it out and stay independent until the end

I don't think Sequoia VC is complaining too much that WhatsApp never went to IPO. They still got a good return when Facebook bought it.

Also, I don't think VCs are actually that single-minded about IPO-or-else... especially for SaaS/enterprise type of startups. They will tell the founder that the more likely exit scenario is a bigger company acquiring them. This is not a big secret.

[dasil003]

You can also grant equity in a bootstrapped or angel-funded company where the goal is not an exit, but to build a profitable business. The main thrust of my point is that granting equity to employees is not only for VC-funded companies in the typical moonshot case study.

[id122015]

Thats exactly what I told an investor who approached me. It looks like these people look only for money/IPO and demanding from us not only a product but also to make an executive team.

I give up the big profit, I only care about "not caring for employees"

[mathattack]

VCs exist to find the small subset of companies that need cash for hypergrowth. It's not for everyone.

For many other businesses, a loan or swear equity is more appropriate.