Sponsored by Momentum Ventures
If you're looking for venture capital, you may have heard that one of the big advantages of VC funding (in addition to the money) is the benefit you'll derive from the advice and contacts of your investors. But that's a myth according to a Harvard Business Review article. An investment from traditional venture capitalist won't assure your nascent venture will succeed.
“Venture capital is essentially a gamble on an idea, consumer adoption, and marketplace conditions," explains Matthew Keezer, CEO of Momentum Ventures. "Although entrepreneurs might expect venture capitalist to take an active interest in their firm and provide good advice and guidance, that doesn't always happen. And, funding, alone, won't necessarily lead to success."
In fact, according to one source, historically 9 out of 10 companies that venture firms invest in fail. Another statistic shows that up to 77% fizzle out or die.
"That's why Momentum Ventures works a little differently," says Keezer. "We use a strategy that has resulted in a 100% success on all of our team ventures." What's different from other VCs he says is, "We prefer to place our bets on our awesome team executing and succeeding within a proven business model."
Their belief in emulating proven business models, reducing risk, and banking on the experience and expertise of their team of developers, marketers, and business leaders has resulted in all seven of their businesses achieving success.
Based in Montreal, Canada, Momentum Ventures was launched in 2007. Their first venture was in streaming media, and since then they've added affiliate marketing platforms, ad-serving platforms, and online travel to their portfolio. Their flagship company, FlightHub, was launched in 2012 and now brings in $1.5 billion in annual sales.
Their Success Formula
Why have Matthew Keezer and Momentum Ventures been able to innovate and outperform the competition? Why do they have a success rate others only dream about matching?
“We look for three things when starting a new business," says Keezer. "Firstly, we have to find and identify an industry we’re actually passionate about and are ready to immerse ourselves in. Secondly, we look at businesses within that industry that are doing well now and will continue to do well in the future. Lastly, we determine whether or not we have a reasonable entry point into the industry.”
While other venture capital firms will also look at the industry and the opportunity, where Momentum Ventures breaks the traditional venture capital mold is by relying on the execution of their own team. FlightHub, for one, is so successful because it is the product of the team’s analysis of the demographic and their effort to create a better online service.
Momentum Ventures is reimagining venture capital and putting a different spin on it. Their newest twist: their $500K Momentum Ventures Challenge. The challenge is an outreach to potential entrepreneurs and business leaders who are looking to become Momentum Ventures’ newest business leader. More information about Momentum Ventures and its $500K challenge is available in this immortal.org article.