Creative capital is the secret sauce, not venture capital – TechCrunch


Around 90% of startups ultimately fail, and the reasons for failure are well known: under-capitalization, scaling challenges, lack of competitive advantage or realistic intellectual property. But what about the 10% who succeed? What did they do to beat the odds?

To create a path to market success, startups need two essential asset groups: venture capital and creative capital.

Venture capital is the financial and operational assets invested in a new, unproven business venture. Creative capital includes the design and development assets that bring a great idea to life.

Venture capital receives the most attention, but it is creative capital that can ultimately last longer and potentially become more valuable.

Billion dollar unicorns like Airbnb, Lynda.com (now LinkedIn Learning), Square, YouTube, Byju’s and Pinterest benefited from “creative” founders who were physical and digital product designers, educators, developers and visualizers. These companies have been very successful in creating and amplifying stories and visualizations to generate interest.

Venture capital usually comes after rigorous assessments and due diligence cycles. However, when creative capital is developed and applied before venture capital, it helps speed up these assessments and analyzes of a business concept, often speeding up product deployment, reducing founders dilution, and improving valuations.

So what is creative capital?

Depending on your industry, creative capital is defined as a set of strategic assets that may include:

  • Information and data on the target audience.
  • Visualizations of products, services, experiences, etc.
  • Branding, naming and communication systems.
  • Product design and engineering prototypes.
  • Preliminary projections of development costs.
  • Search and introduction of network partners.
  • Future product extensions and roadmaps.
  • Digital content, platforms and configuration.
  • Identification and development of intellectual property.
  • Expert advice to investors.

These assets are almost always created to be combined for planning and business introduction purposes, eventually helping businesses bring their ideas to life.

Why creative capital?


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