In a groundbreaking perspective shared on Crunchbase News, Hebron Sher of Zevo argues that many startup founders may not need venture capitalists (VCs) in the early stages of their journey. Instead, Sher suggests going straight to the source of capital—limited partners (LPs), family offices, and high-net-worth individuals—for funding. This approach could offer founders more control and better alignment with investors who have a longer-term vision.
Sher highlights that VCs often come with stringent terms and high expectations for rapid growth, which may not suit every startup's pace or goals. By contrast, LPs and individual investors might provide more flexible arrangements, allowing founders to focus on sustainable development rather than aggressive scaling. This can be a game-changer for early-stage companies looking to maintain their unique vision.
Another key advantage of targeting LPs is the potential for personalized mentorship. Unlike VCs, who manage multiple portfolio companies, individual investors or family offices may offer more hands-on guidance and tailored advice. Sher emphasizes that this direct relationship can be invaluable for navigating the challenges of building a business from the ground up.
Additionally, Sher points out that bypassing VCs could help founders avoid dilution of equity at an early stage. By securing funding from high-net-worth individuals or smaller investment entities, startups might retain more ownership and decision-making power, which is crucial for long-term success.
This perspective is particularly relevant in today’s funding landscape, where alternative investment sources are becoming more accessible. Sher encourages founders to explore networks and platforms that connect them directly with family offices and LPs, potentially revolutionizing how early-stage funding is approached.
For founders considering this route, Sher’s insights serve as a reminder to weigh all options before committing to traditional VC funding. As the startup ecosystem evolves, tapping into alternative capital sources could become a defining strategy for the next generation of entrepreneurs.
Maria Lourdes
