How can we give what startups really need?

Apart from the talents and sheer determination of the founders, it is generally agreed that startups need help on financial capital and human capital (i.e. ‘talents’).  In fact, every business does.

If we look deeper into the startup ecosystem, most financial supports already come with some type of help on the ‘talents’ aspects.

For example, apart from providing the funding, angel investors are generally the experts in the industry/function that the startups are operating in (in fact, that’s what startups should be looking for when they search for angel investors, it’s not just about the money). For accelerators and incubators, apart from the initial funding (sometimes can be very limited), they generally provide the ‘talent’ support through their ‘mentor’ networks. And for venture capitalists, they usually advise startups at the board level.

Whilst the flow of capital into this startups market does not seem to be the issue in the foreseeable future, the question seems to be – can we do anything more than what we have on the human capital front?  In fact, many argue this is way more important than financial support at this early stage. If this is true, how can we monetise it (at the same time startups generally do not have the money)?

As I get deeper into this issue, I see there are some fundamental issues that need to be discussed first.

  1. How is it different in terms of providing support in financial capital and human capital? More importantly, is it possible to better combine the two as one ‘package’?
  2. It’s about flow of money. When you provide financial capital to startups, money goes to them. When you provide human capital to startups, you are taking money away from them (or somehow embed it in a system because at the end of the day, someone needs to fund this effort).  This impacts on how you should ‘market’ yourselves.
  3. The target ‘customers’ are fundamentally different. If you are looking to invest into startups, you look for ones that are ‘ready’ (for investment). But if you are looking to provide human capital support to startups, you look for ones that are ‘not ready’ (or ones that need help).  When we try to combine the two into one, it becomes the classic chicken and egg  or catch 22 issue depending how you want to look at it.
  4. There are companies out there who build startups themselves.  But is it possible to develop these ‘vanilla model’ and sell them to startups to kickstart their business? – from design and branding of initial name card, website and presentation deck, development of business model canvas, user group testings, SEO, mailing list and general marketing, initial recruitment (or time share) of dedicated support staff, industry and functional expertise, project management, connecting to the existing markets, to the overall general management of startups ‘basic’ operations. Is there enough money from the financial capital world to somehow make this possible for at least some types of founders?  If so, does this make the founder more like an investor?  Is this is a good or bad thing?
  5. Alternatively, can we make it a buy-side arrangement where the traditional investors would pay for it?  Would angels, VCs ever pay for this ‘professional managers’ services for startups?

To be continued.


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