Start Up Goldilocks

Unicorns: A Cautionary Tale

Recently, I was brought in to consult a venture capital fund as they interviewed an acquisition target. (Fun project! Help total strangers decide to avoid or create a massive wealth event for other total strangers, all while never leaving your home. I've had worse times, honestly.)

This mostly consisted of spending time in remote meetings, asking questions about the offering when pertinent, and taking a lot of notes to share with the VC later.

It was an interesting project, and the agency that hired me was pleased with my work... but that's not the point of the story. (Also, I'm not going to disclose the outcome of the decision, because confidentiality and the such.)

 Without getting into the details of what was discussed and decided, what the most striking point to me about the entire experience was how similar the prognosis for the target company was to other companies that I've known.

To wit: you can try to change the world and create amazing value for your clients with something new and exciting and game-changing...

But if what you are doing is really all that and a bag of chips, and the market shows it with explosive growth and revenue...

Well, why wouldn't a whale (i.e., Google, Amazon, Adobe, or maybe their Chinese competitors) just swim on in, buy your company or similar tech, and just be done with the category?

And if that has not happened... well, is your category or technology really all that, and if the answer is no, then why should the VC be around to put more cash into something that isn't going to change the world and cash out?

It all puts you in a Goldilocks moment -- markets that are neither too big nor too small, but *just* right -- and, well, having your start up win is hard enough without adding extra hoops to jump through.

I know, I know -- I'm missing the point of Start Up, which is when your stock option lottery tickets cash out and you get enough moolah to afford real estate in any market, all while setting yourself up to either continue working with the whale (unlikely) or buy yourself a lot of runway to take off with another plane.

But on some level, well, having a steady gig is its own reward, and companies that keep their people tend to do things like keep communities together. Kind of useful things, those.

So, maybe I'm just old fashioned here... but how about we just have companies that turn a profit as soon as humanly possible, and reduce their need for outside capital in the first place?