The Startup Velocity Question: MicroVC Portfolios

As of December 31, 2023, in the United States alone, there are 54,000 venture funded startups.

Let us refresh our memories on what constitutes the Venture Capital model: hyper growth startups that grow at an exponential pace. Companies that can go from 0 to $100M in revenue in 5-7 years.

Hyper Growth is not a natural state of business. Most businesses grow at a linear pace at best.

Maybe, 1000 businesses can achieve venture scale growth.

The rest would have to find other strategies.

They would need to be positioned for a capital-efficient exit path.

For MicroVC portfolios that have companies with $1-5M in funding but struggling to achieve exponential growth, it may be time to rethink the positioning.

Key Takeaways:

• As of December 31, 2023, there are 54,000 venture-funded startups in the United States.
• Globally, the number is closer to 75,000.
• The Venture Capital model expects hyper-growth startups to reach $100M in revenue within 5-7 years.
• Hyper growth is not a natural state for most businesses; most grow linearly at best.
• Only about 1000 businesses can likely achieve venture-scale growth.
• Companies that can’t achieve exponential growth need alternative strategies.
• MicroVC portfolio companies with $1-5M in funding but struggling to grow exponentially may need to rethink their positioning.
• Capital-efficient exit paths should be considered for companies not meeting VC growth expectations.

My Question to You:

Have you considered alternative growth strategies for your startup?

If you think you need help, consider 1-on-1 Private Consulting with me. I will diagnose and create a path forward in an hour.

Photo by Napendra Singh on Unsplash

This segment is a part in the series : The Startup Velocity Question