If your business is a startup seeking venture capital, your prospects are dim. Instead, you should focus on trying to grow the business without VC funding, says Dileep Rao, part of the faculty at Florida International University College of Business and author of Nothing Ventured, Everything Gained.
The erroneous perception that VC funding is necessary for a startup to scale has many new business owners asking the wrong questions, he says.
“The net result is that more entrepreneurs ask “How can I get VC” rather than “Will I get VC,” “Should I get VC,” or the key one, “Can I build my company without VC or by delaying VC?” he recently wrote in his blog published by Forbes.
He says the probability of a new business receiving VC funding is significantly less than 1% — or 0.0005 (he did the math). The odds aren’t much higher for post-startup companies — 0.00068.
Instead of chasing VC funding, business owners need to be building their skills and networks, and growing the business with other sources of capital.
The irony, of course, is that if you do that well, you just might get the attention of venture capitalists.