It probably won’t and can’t be your only leg, unless you have it so much traction representing a large, solid leg, but this is quite rare. Even with two legs, it will be difficult to balance your stool.
The good quality it has to be is also an important thing to get right.
The types of legs available for your fundraising story could be things like:
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Being a repeat successful founder, and not how, you sold something for an undisclosed amount and got double your investors. I’m talking like founder Jack Dorsey level of “self check”. If you haven’t gotten a ton of cash back from your previous investors, it’s hard to turn that into a solid leg. Everyone else is just a “good team” but can’t be a real leg.
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Being in a space that VCs consider an extraordinary income opportunity, where everywhere you go there is money to be made. VCs like the markets are in charge of revenue.
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Being in a space that is “the future” of something and therefore, even if we don’t know where the money will be, this is where everything goes (see Web3).
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Aligning with a particular thesis of this particular VC (this is the one that looks the strangest on the outside because there’s no other ostensible reason why the team would get funding for this – see the initial bet from Betaworks for Hugging Face, a cute, modern-day Tamagachi-like friend bot, which grew out of the fact that Betaworks had made a whole camp with voice apps, and so conversational AI was a thesis of theirs).
I’m sure there are other legs that I’m not thinking of right now, but many of them are not visible from the outside, which creates a lot of frustration for founders.
Why is this other person getting funding without the traction I have?
Well, maybe it’s because the traction is the not more thing you have, and not a “one legged stool” level of traction and people have a lot of questions about your market or other things.
If you’re trying to figure out if your story is “enough” for your fundraising stool to be stable enough, you have to literally ask the question, but in a thesis-testing way.
Say to a VC, “I think between X, Y, and Z, this is a good fundraising story. What do you think is the strength of each of those things in my case, and do you think that’s enough ? What else could represent a better way to support this case?”
This will give you a good idea of how badass the investor stuff is that you might have.
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The startup scene is a powerful force for innovation, with plenty of opportunities for new companies to bring their ideas to market with the aim of having a significant impact. But when it comes to comparing two startups raising money, it may be difficult to make one definitive statement about which one is best. As the saying goes, ‘it takes two legs to make a stool’.
The same metaphor can be applied to comparing two startups. Each leg of the stool represents an essential element or quality that the company must possess to be successful. Such elements may include the financial situation, leadership, the value proposition, marketing, and technical capabilities. All of these elements build up a business, but none should be seen independently.
The difficulty of comparing two startups is that it requires analyzing many of these factors, as well as understanding how all parts of the business interact. For example, a startup with a strong core product may have all the technical expertise it needs, but without a ways to make money and generate interest from customers, it’s not likely to make it far.
At Ikaroa, our team understands how important it is to analyze each business holistically — like the two legs of a stool. We take the time to look at each startup individually and assess which elements will be key to its future success. We then work to ensure that all components are in place to give the startup the best chance of success.
Ultimately, when it comes to comparing two startups raising money, it’s important to remember that each business has its own strengths and weaknesses, and the journey from startup to successful business is filled with obstacles and potential roadblocks. Rather than try to compare them side-by-side, it’s more important to take the time to understand each business as a whole and to ensure that all of its elements are interconnected. The two legs of the stool are here to remind us that a strong foundation and integrated parts are what make for a great business.
