TLDR:
- News startup, The Messenger, failed to raise $50 million, resulting in its shutdown.
- 94% of billion-dollar entrepreneurs did not rely on venture capital, showing the flawed nature of the VC model.
Amidst The Messenger’s collapse, there are seven lessons that entrepreneurs can learn:
- Decide whether to rely on VC or be finance smart.
- Make the VCs come to you.
- Authenticity and credibility matter; do not fake it.
- Consider whether your startup is a tech or media startup and understand the stage of the industry.
- Find an unmet need in an emerging trend.
- Use a finance-smart strategy on the emerging trend.
- Avoid multiple rounds of VC to reduce dilution and stay as a leader.
The Messenger’s strategy of spending $40 million to earn $3.8 million in revenues and having expensive offices was not finance-smart. Entrepreneurs should focus on substance and avoid showing off without real results.
