The best place to find venture investment

Inc. 5000 companies are better suited than VCs or angel investors to provide money and the skill necessary for establishing your start-up.

http://www.inc.com/karl-and-bill/the-best-place-to-find-venture-investment.html?cid=em01015week41

The Best Place to Find Venture Investment

Inc 5000 companies are better suited than VCs or angel investors to provide money and the skill necessary for establishing your start-up

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There is always a lot of excitement around start-ups After all, everyone wants to get in on the ground level of the next Facebook That's why angel investing is so popular for high net worth investors, and why venture capital is seen as a sexy career choice

We read a great article this week by Andy Rachleff, president and CEO of Wealthfront and an experienced venture and angel investor Rachleff argues against angel investing and claims that most venture funds create no value He cites this now famous Kaufmann Foundation research and

a Cambridge Associates study in saying that, "only about 20 firms or about 3 percent of the universe of venture capital firms - generate 95 percent of the industry's returns."

This got us thinking If venture capital and angel investing were largely unsuccessful, who would be best positioned to build businesses? While individual entrepreneurs can create small businesses with their own capital, what's the best way to build big businesses, and build them quickly?

We believe the best place for building a big business venture is within the companies that we write about: Inc 500|5000 companies Here's why:

1 These companies are already experienced managers of growth and growth capital, and they don't have the bureaucratic organizational challenges of larger companies

2 They are large enough more than 75% of the Inc 5000 generates more than $5 million in

annual revenue to quickly scale a new business

3 They have developed unique capabilities and strategic assets in their industries, which can be leveraged into developing adjacent businesses They are not mere start-ups with a "good idea."

4 Their core business and growth provides good access to capital, including lower cost debt

funding

Our sense is that traditional venture funds aren't the right groups to create rapid, sustainable growth Most successful venture firms are good at placing bets and managing a portfolio

Executing a strategic growth path takes a different set of skills, such as building a management team, identifying strategic opportunities, and delivering on specific key milestones Growth

companies, especially those in the Inc 500|5000, are a prime source of these skill sets

Given that our firm, Avondale, is engaged in partnering with investors and middle market

companies to find new growth engines, we are putting our money where our mouth is on this topic Similarly, many of you run growing companies and have sources of growth, in the form of new business models, within your market segments We would encourage you to find and invest in new ventures within your sector and create the next venture success

Share your thoughts and questions about building a venture within your company with us We can

be reached at karlandbill@avondalestrategicpartners.com.

Read more:

When to Grow and When to Cut

We All Scream for Customer Insights

Simple Way to Create a Scalable Brand

Karl Stark and Bill Stewart are managing directors and co-founders of Avondale, a

strategic advisory firm focused on growing companies Avondale, based in Chicago, is a

high-growth company itself, and is a two-time Inc 500 award recipient @karlstark

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