Creative Capital: How to Bypass the Venture Capitalist Route
In the competitive and ever-changing environment that is Silicon Valley, the venture capitalist (VC) route to success seems to have stood the test of time. By providing worthy startups the capital they need to turn their idea into a full-fledged company, VC’s have developed a proven track record. With billion-dollar companies like Facebook and Alibaba getting their start from venture capitalists, it may appear like a VC investment is an essential ingredient in the formula to success. However, as I alluded to before, the environment of Silicon Valley is ever-changing and though VC’s aren’t going anywhere, startups are beginning to search for alternatives to this prescribed method of business growth.
As VC term sheets become more lopsided and initial investments become tougher to come by, it has become apparent that the VC path has become increasingly trodden and less fruitful. This has led to alternative routes being forged, most notably the creative capital process. Whereas VC’s provide a capital investment in return for equity in your company, the creative capital process offers expertise in the creative, marketing and design fields that will help develop your brand from the ground up in exchange for a combination of equity and work fees.
Often times in the VC funding path, companies take their new found VC capital and reinvest it in marketing to reach new customers fast. For example, companies like Apple and Nike initially invested exorbitant amounts of money into blockbuster and traditional media advertisements to reach their consumer and build their brand. However, the creative capital route bypasses the VC’s and marketing investment by going directly to design and creative agencies, like Venga Brands, that help build brand image. Creative capital has become steadily more relevant because the value of a brand cannot be understated, and this method provides steady collaboration and an overarching strategy that will help your brand grow.
Despite creative capital being young relative to the venture capitalist route, it does still have a proven track record of success when building brands from the ground up. Companies like Casper, Allbirds, Warby Parker and Harry’s have followed the creative capital path by partnering with branding and creative agencies, only to go on to gain billion-dollar valuations. But despite these name-brand success story examples, you may still be asking why does the creative capital route actually work? It’s because there is an emphasis placed on strategy and brand image that leads to startup companies forging an elegant product and brand image that ultimately catches the eyes of a targeted consumer group.
Great brands and companies are not built through initial investments and capital alone. They are built by meticulously evaluating the strengths and differentiating factors of the company and using that as the direction and bedrock for your brand. By partnering with creative, design and branding agencies, you open your brand up to a huge wealth of experience and knowledge into this process of brand building. Though this may sound like an intimidating, elaborate and long winded process, that’s because it is and branding agencies like Venga are here to help.