Investing in a Startup. Is That Safe?
I enjoyed a 5K run in the snow today, wearing only shoes and shorts and nothing else. Was it safe? No. The snow was hiding the pits and the ditches. I tripped over the root of a tree once, which is risky when you’re jogging half-naked with no protection. Was it exciting? Absolutely! Snowflakes on naked skin feel amazing. And blood pumping to keep a body warm gives a delightful kick at 7:00 in the morning.
Someone in the park said, “Bravo! Are you Swedish?”
Investing in startups is also not safe. They are called high-risk investments for a reason. That’s why you should never invest all your money in the same startup. (Not even when you are the founder!) However, with a decent spread of your investments, you should be able to reduce the risks and increase your opportunities.
I do that as well.
I personally invested more than € 500K in Agility Scales, and I’m still investing more. I also spend time and resources on Shiftup, my new brand of workshops (which are selling like hotcakes, by the way — the workshop organizers are quite happy.) I also invest time and money in a new series of books, of which Startup, Scaleup, Screwup will be the first one, and I expect more books to follow. And I am still involved in Management 3.0, Happy Melly, WorkshopButler, Wemanity, and more.
Some people told me they are hesitant to co-invest with me in Agility Scales and its Mind Settlers platform because our future cash flow is so uncertain. Sure, I understand. We intentionally don’t do any marketing because the product isn’t ready to be used on a large scale yet. From the research for my new book, I learned that the average time until startups reach product/market fit is three years. This average is probably longer for startups with so-called blue ocean strategies, that operate in largely unknown terrain.
The average time until startups reach product/market fit is three years.
Our Agility Scales startup now exists one year and nine months. I do not expect any great successes until at least three years have passed. Do we have that time? Sure we do. With my income from other sources, I can support the team, with a minimally required burn rate, to keep working on our lean experiments and validating our business model canvas.
Obviously, I must support the team financially because participants in my new Shiftup workshops will be using the Mind Settlers app this year. And my new book, which comes out in April, will also be heavily supporting the Mind Settlers platform. Oh, and the book promotes the workshops, and the workshops sell the books, and so on. Everything is cross-promoting everything!
But it’s nice not to be the only one funding the platform. I am continuing my conversations and negotiations with several large investors. These things take time. Meanwhile, on top of our continuous crowdfunding, I keep feeding the bank account of Agility Scales in a lean manner: just-in-time! And the business is set up in a very agile way, with few dependencies and no hard commitments.
I keep feeding the bank account of Agility Scales in a lean manner: just-in-time!
Our team needs time to get to product/market fit. It is the hardest thing we’ve ever done. But we are all learning a ton and we’re making decent progress. Success could be just around the corner! But it can also keep us searching for another year or two.
Now is your chance to join me as a co-investor. We still have a (steadily dwindling) pool of unsold certificates that we sell at last year’s valuation. We will increase the valuation of the company as soon as we feel we deserved it.
Investing in startups is not safe. Like running in the snow in your shorts, at -2 degrees Celcius. But it’s exciting!
And stay warm this winter.