#3 Angelinvesting.it - From idea to Series A - Weekly Newsletter

A unicorn or a villa in Ibiza?

Feb 04, 2023

My friends Fede, Guidozzi, and Mattia are incredibly diverse individuals. Yet, they share one commonality – they each run a small medium enterprises with several million in revenue and double-digit margins, and they've never had to raise a single euro. When you meet them, they often have a beaming smile on their faces.

Last week, I met with 25 founders who were seeking venture capital for their startups. To over half of them, I recommended that they reevaluate their approach. Instead of pursuing the unicorn dream, they should concentrate on building a strong bottom line (possibly self-financed).

As a first-time founder in particular, it may be wiser to set a smaller, more achievable goal. Goal 1: get "fuck you money" in your bank – a sufficient amount of financial independence that gives one the freedom to say "fuck you" to authority, obligations, or expectations.

Enjoy one of the most privileged private islands in the Mediterranean Sea - Ibiza | 8835 | Ibiza | Sotheby's International Realty — 1Mln EBITDA can buy you this.

It may seem odd that I am providing this advice, but there are three reasons why it makes sense:

The statistics show that it is more likely to be successful with an SME. 99% of Y-Combinator startups fail to find product-market fit.
Earning 1-2 million EBITDA per year, without having to split the profits with anyone but your co-founders, is a valuable outcome.
Some projects may have a strong digital component, but still not classify as a tech company suitable for venture capital