“The great entrepreneurs and operators love the down market,” says Michael Eisenberg in a recent TechCrunch article. “So this is THE best time to invest if you can stomach it.”
Eisenberg argues that the VC frenzy created a lot of “tourists” or “wantrapreneurs” who aren’t quite iron-willed enough to stick around for the downturn. That includes entrepreneurs who back out of their endeavors to take more secure jobs once the money gets tight, as well as investor tourists who made emotional investments without fully understanding the VC market.
Tourists, Eisenberg says, end up inflating the market, and as they leave in the face of a downturn a new ecosystem will emerge; one that doesn’t support mediocre companies and one that favors deep strategic thinkers.
The coming market correction, we believe, will also make room for new venture models to gain more traction.
Already, new models have emerged to address the high risk associated with traditional VC’s. By extending support to startups beyond financial backing—including physical infrastructure, methodology, and shared staff support—new venture models create a stronger foundation for startups to grow more efficiently.
At Aspire, we take a similar approach. Our ventures benefit from a core team of researchers, developers, scientists, and marketers so that our entrepreneurs can focus on building the best product possible. Our ventures are also subject to a process of rigorous tests that demonstrate market fit and development milestones, ensuring that the fundamentals are in place for continued success. Our ventures also gain from physical infrastructure at our venture lab.
But we take things a step further with an approach uniquely our own that helps bring some much-needed stability to the VC model (See Graph). All of our ventures draw from a community pool of proprietary technology tools, including our A2i machine learning platform. Those tools act as building blocks for a repeatable process to building new products and companies, so our ventures don’t have to lose valuable time building everything from the ground up. That means our ventures have a shorter time to market, and that means less risk of time and money wasted.
In the changing VC landscape, Aspire Ventures presents an attractive alternative for professionals who might otherwise feel themselves trapped between the two extremes of slow-moving corporate environments and unstructured, high-risk startups. And if the recent tremors in the market are any indicator, that’s exactly what investors are looking for too.