A Founder’s Q&A to Creating a Community-Driven Startup, Attracting Venture Capital Investment, and Going for Unicorn Status
What are community-driven companies?
Community-driven companies are businesses that prioritize the needs and wants of their communities and focus on creating value for their users. These companies often rely on organic growth and referral marketing to attract new users and prioritize the feedback and input of their communities in their decision-making and product development. The success of community-driven companies can be seen in their valuations and investment activity, as well as in their ability to generate outsized returns for investors.
How can you build a community-driven company?
To build a successful community-driven company, founders should focus on creating value for their users and fostering a sense of belonging and engagement within their communities. This can be achieved through a variety of means, such as offering high-quality products or services, providing excellent customer support, and regularly soliciting feedback and input from users.
One example of a successful community-driven company is Canva, an online graphic design platform that allows users to create and share professional-quality designs. Canva has built a strong community of users by providing an easy-to-use platform, regular updates and new features, and a wide range of design templates and tools that can be shared in community. This focus on creating value for its users has helped Canva attract millions of users and secure a valuation of $40 billion.
How can you fundraise from VCs and secure capital?
Once a community-driven company is launched, founders can begin the process of raising capital from venture capitalists and other investors. To do this, founders should focus on building a strong business plan, highlighting community-driven ROI metrics (e.g., CAC, LTV) and the unique value proposition of their company, and tying it back to the potential for outsized returns.
One community-driven company that has successfully raised capital from venture capitalists is Discord, a popular gaming and communication platform. Discord raised $500 million at a $15 billion valuation in 2021. This was partly because it had a strong community of users and focused on creating value for them. By showing how their platform benefits gamers and investors, Discord was able to raise and secure significant capital to continue to grow and evolve.
How can you build a community-driven unicorn (AKA company valued at ≧$1 billion)?
To achieve a valuation of $1 billion or more, community-driven companies must continue to focus on creating value for their users and fostering a sense of belonging within their communities. This can be done in many ways, such as by offering new and innovative products or services, expanding into new markets, and continually improving the user experience.
One community-driven company that has achieved a valuation of over $1 billion is Reddit, a popular social news and discussion platform. Reddit has built a strong community of users by offering a platform for open and honest discussion as well as by regularly updating and improving the user experience. This focus on creating value for their users has helped Reddit attract millions of users and secure an acquisition by Conde Nast in 2006.
How can you build a community-driven decacorn (AKA company valued at ≧$10 billion)?
To achieve decacorn status, community-driven companies must continue to focus on creating value for their users and creating a sense of belonging within their communities, while also driving innovation and growth in the market. This can be done through a combination of strong leadership, excellent customer support, and a clear vision for the future of the company.
One company that has achieved decacorn status is Bytedance, the parent company of TikTok. Bytedance has built a strong community of users by offering a fun and engaging platform for sharing short-form videos, as well as by regularly updating and improving the user experience. This focus on creating value for their users has helped Bytedance achieve a valuation of $300 billion and establish itself as a leader in the tech industry.
Creating a community-driven startup, attracting venture capital investment, and achieving unicorn or decacorn status are all possible with the right approach and focus. By prioritizing the needs and wants of their communities and creating value for their users and customers, founders can build successful businesses that generate outsized returns for investors. By leveraging the collective knowledge and expertise of their communities, these companies can drive innovation and growth in the market and achieve the coveted unicorn status.
- The Rise of Community-Driven Companies: Why They are Great for Founders and Investors
- The LP Pitch for Investing in Ganas Ventures
- The Benefits of Becoming an LP to a VC Fund During a Downturn and Why Everyone Should Consider It
- The Benefits of Investing as an LP in VC Funds Compared to Angel Investing in Startups
- How to become an LP in a VC fund
- Early-stage micro-fund VC 101: What Investors, Founders, and Scouts Should Know
- Welcome to Ganas Ventures!
- Community-Driven Companies: What They Are and Why We’re Investing in Them
- Ganas Ventures: How We Source, Select, and Support Startups
- Ganas Ventures Resources
- Ganas FAQ
About Lolita Taub: As a Latina emerging manager and general partner at Ganas Ventures, I always want to work with or invest in community-driven founders, funders, and friends. I have a strong track record with 15 years of experience in the Silicon Valley ecosystem. I have sold over $70 million in tech products and services, made over 90 investments as an angel investor and venture capitalist with Backstage Capital, Lightspeed, and The Community Fund, and had 3 successful exits from my portfolio.
Forbes, Inc Magazine, Nasdaq, and others acknowledge my efforts in advocating investment in underestimated and undervalued founders. I completed my undergraduate studies at the University of Southern California and earned my MBA from the IE Business School.
In addition to my professional accomplishments, I am a dedicated community builder with more than 78,000 founders, funders, and ecosystem friends. And I want to back founders who care about the community, invite LPs into the Ganas Ventures family, and build wealth in the community that will last for generations.