The last time I presented at an event for investors, the first five people all asked me the same question, “Any exits yet?”
The more years I spend focusing on revenue-based investing, the more that question is getting on my nerves. Perhaps some of that is on me, as the talks I give are generally titled “Investing without Exits” or “Alternative Exits” or “Structured Exits”, co-opting the meme of an “exit” without meaning an acquisition or IPO. Perhaps my frustration would lessen if I just interpret that question as “How is your investment cash flow?”
Trouble is, that is not what the questioner is thinking. The more investors I talk to about revenue-based investing, the more I see that the paradigm of early-stage investing via buy and hold equity is so ingrained into the startup culture that just about no one notices that those investment structures are a choice.
It is a choice by the investors to use an investment structure designed for unicorns, when 99.9% of all startups are going to be some other breed of animal. It is a choice by the entrepreneurs to structure their Angel rounds using the “standard” terms, which inevitably put them on a path where their investors will insist that they sell their company.
There are other choices, and slowly but surely, as I talk more and more about these alternatives, investors globally are starting to share their stories of their first alternative structures.
And now that I’ve worked with over 80 “fledglings” through Fledge, I’m seeing more and more entrepreneurs who have no desire to practice California Capitalism.
I met my first official Conscious Capitalist last week, and one of the Fledge investors has organized the first Conscious Capitalism Seattle event.
Paradigms don’t shift themselves.