Risky Business: Venture Scale vs. Venture Risk

So, there I was causally reading The New York Times about a freaking ice cream shop when I realize the <a href="https://www.nytimes.com/2023/06/16/dining/ample-hills-creamery-brooklyn.html" rel="noopener ugc nofollow" target="_blank">article</a> isn’t about ice cream at all. It’s about risk. I wasn’t that familiar with the story of Ample Hill, its rise and fall, nor its efforts to rise again. But this time, to do so differently. In their first incarnation, they’d raised $20M+ of venture capital and attempted to run the playbook of a venture backed startup: <blockquote> “The Ample Hills story is a familiar one in the modern start-up world: Grow too fast, come down hard. This time around, the couple are determined not to get in over their heads. “Toward the end, I was in the office so much that I felt like I didn’t even know how to make ice cream any more,I won’t let that happen again.” </blockquote> There is nothing inherently “wrong” with venture capital. Its impact and ability to fund, and rapidly scale, businesses is undeniable and highly valuable. But there is an underlying business model driving behavior that many overlook or ignore until they can’t deny its impact. This added pressure to scale quickly with venture capital can serve as a valuable forcing function to sift the truly venture scale companies from those that aren’t. The early flameouts are endemic to the venture modeal and allow investors to allocate their remaining dollars to the companies with the most upside potential who, in turn, can drive meaningful returns. The definition of “venture scale” is oft debated, but comes down to either a company being able to reach $1B in value, $1B in revenue or return the entire venture fund that backed them. The expansion of fund sizes has only made venture scale math murkier. <a href="https://bryce.medium.com/risky-business-venture-scale-vs-venture-risk-9593cf5ce66c">Website</a>