Now, this is a very interesting concept and one which I have found very useful to learn about and adapt into my own. A venture builder is a concept whereby a group comes up with a business idea and then hands that idea to someone to run it and in response give equity with certain conditions.
My problem with this concept is that it’s not passion-driven unless you can find the exact right person. Businesses and ideas need someone who is 100% behind them, to strive when anyone else would give up or walk away.
A technique that I prefer to use is on a success basis. So you go to someone who needs the money, you support their idea, their vision. You then back them, finance them, structure them and help them get started providing initially only a smaller amount of equity and then a larger proportion when certain milestones are reached. I’ve done this in various capacities and in most cases becoming a non-executive chairman for the business. I then provide advice where useful and valuable as the business grows. Venture capital firms do something similar where they invest but then ask for further warrants or covenants if the business underperforms. It is effectively very similar but just differently dressed up.
In the example of a business I am a shareholder in and non-executive chairman of, Viderium, I used this model with Ross Archer who I backed and gave him the opportunity to follow his vision through. I really enjoyed learning about the cryptocurrency market place as well as the world of data centres. Again I think one of the most fantastic things about business is the journey, the road to discovery and connecting with one’s passion. Now I might not be passionate about data centres or cryptocurrencies like Ross is but I am passionate about the process of believing in someone and helping them to pursue their goal or dream.