By guest author Irina Patterson
Over the past year, we have been talking to various investors – VCs and angels, and incubators and accelerators. What we discovered that the entire startup ecosystem is structured to look for and invest in the less than 1% of the entrepreneurs who are ready and fundable.
For example, Highway 12 Ventures, a $75 million venture fund in Boise, Idaho, gets 500 deals a year. They invest in four. That means that less than 1% of the entrepreneurs who apply succeed in getting financed.
One of the Silicon Valley’s super angels, Mike Maples, told us that he gets 7,000 deals a year and invests in 12 to 15. That’s a 0.21% hit rate. The flip side: a 99.79% rejection rate.
The sad story is that there are way too many non-fundable businesses floating around in each community. Those businesses contribute significantly to what we call high infant entrepreneur mortality rate.
Our 1M/1M Program is designed to help those early stage at-risk-businesses to become strong and sustainable by using thoughtful bootstrapping. And for those ideas that are simply bad business ideas, 1M/1M guides entrepreneurs on how to develop better ones.
We believe that the global economic system will perform significantly better if we can help those 99% of entrepreneurs who are non-fundable for one reason or another. 1M/1M Program is designed to empower entrepreneurs regardless of their potential to attract investment.
If you are working with early-stage entrepreneurs, you can use 1M/1M Program to reduce your local infant entrepreneur mortality rate.
Here is how: 1M/1M supplies the methodology, the curriculum, the connections. Your organization provides your local entrepreneurs with community support. We see this as a powerful synergy of combining resources, without wasteful duplication.
We see it as an example of truly democratic, distributed capitalism 2.0.
Note: The 1M/1M team has invested significant resources to engage with and understand the challenges of the Incubator industry around the globe. You can sign up for our opt-in mailing list to get this information via email on an ongoing basis.