Capital Efficient Unicorns: Some Strategies To Consider

I have been thinking about how companies are getting showered with capital these days once they reach product-market fit and traction, and how unhealthy that phenomenon often turns out to be.

Is there another way?

Of course there is!

A wonderful case in point is Veeva, a company that was built with just $3M in capital. They raised another $4M but by then, the company was already on the roll, and today, it trades in the public market at a valuation of $10.28 billion.

We’ve been covering Veeva for a long time. My interview with Veeva’s CEO Peter Gassner is here: A Late Bloomer on Building a Legitimate Unicorn: Veeva Systems CEO Peter Gassner.

In this context, I want to highlight one of our 1Mby1M portfolio companies, CliniOps, that is executing in a tremendously capital-efficient manner, and has managed to get to product-market fit and traction with no outside financing thus far. You can read more about them here: 1Mby1M Deal Radar 2018: CliniOps, Fremont, CA.

I have seen very interesting case studies of companies that can start closing relatively large deals early on, use some degree of bootstrapping using services, and build strong businesses for very small amounts of capital. Here’s another one that I like a lot: Bootstrapping Using Services to an Awesome Business Model: Inspyrus CEO Nilay Banker.

Just a few thoughts in case you can leverage this model.