Thank you TechCrunch for the dismal miserable news about another venture capital funded business, Akimbo, headed down the toilet.
Akimbo raised $56million to compete in the digital media space, apparently without much success.
If those Venture Capitalists (the same ones that don’t fund any of my businesses because they’re not “sexy enough” – since when has 11 years of growing revenues and profitability not been “sexy?”), had just doled out 560 “little” investments of $100,000 t0 560 members of our Soap Queen community, they would have had a much better return on their investment.
Despite owning the majority of businesses in the US, women entrepreneurs received only a whopping 4.6% of available Venture Capital funding between 1997 and 2004 (Center for Women’s Business Research).
When do you think VC’s will learn that going after the flashy, “huge potential for growth!”, isn’t always where it’s at? That reminds me of a little story about a tortoise and a hare …
Hi Jill –
I’m all personally funded with credit cards, lines of credit and profit from operations. It means slow growth but more manageable safe growth.
Marr – Our business isn’t considered very sexy to VC’s because the craft industry isn’t a “growth” industry. It’s not like a technology which has a .05% chance of growing 100,000,000% in three years and then getting sold to MS or Google for a lot of money.
If you’re an investor and can get a really easy safe 6-9% return, that’s not nearly as cool sounding as a 1500% return on your money in three years.
It’s just that those returns are hard and few to come by AND come with considerable risk, like Akimbo just demonstrated.
I totally agree with you on this. You would think after the dot.com bust VCs would have learned not to throw such extraordinary amounts of money and an unproven business model just because it’s sexy. I get that they are risk takers and the higher degree of risk usually means bigger payoffs when it works out. But why not diversify a little and invest some in proven businesses like your own? I don’t know the story of your approach to VCs, but I have come to know you as a professional and ethical business woman. You’ve been extremely successful at Brambleberry and Otion too. Not sure what’s not to love if you are a VC?
So if you don’t have investor money, how have you funded your businesses? I mean, if you don’t mind me asking?
Dumb, dumb, dumb…that’s what they are.