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When should social impact founders harvest the wealth they've created?

It was late 2019 when Velo's first client, a LatinX female founder of a co-working space with strong startup programming, received a query from an international consolidator about a potential acquisition.


We swung into action.


We mapped out her revenue streams - current and future, forecasted five-year returns and used those to create a valuation for her company. By most accounts, she was ready to respond to this opportunity. But she was not.


It turns out the far more important questions had now just surfaced. Did she want to sell? Now or ever? Was this about a specific number? Or was this about a lifestyle, and a dream?


Now that she saw the revenue streams possible, wouldn’t she want to have more time to do more? What were her responsibilities to her early investors? To her team members?

There is a whole ecosystem supporting how to create a company, but very little on how to grow it and when to harvest wealth.


And yet these are the crucial questions for individual entrepreneurs like my friend, the answers to which make all the difference in the long run.


One Size Fits One

Doing all of the right things to grow a business and access capital is extraordinarily challenging for any entrepreneur. Gathering the technical expertise for growth options and tactics needs to be done real time, while executing the core business.


At the same time, each entrepreneur must ultimately balance the strategic and tactical needs of business growth with their own goals, to grow their businesses in ways that work for them, their families, their teams, their mission.


In other words, when it comes to making the right moves in growing your business, one size fits one.


"Even more than what growth strategies are possible, which growth strategies put you on the path to your goals and dreams is the key question that motivates founders to work with Vstudio, our newest Velo offering."

Carla Dearing, CEO, Velo


Introducing Vstudio

Now 2+ years later, we see the need to do more of this. We are announcing Vstudio to accelerate growth and investment in a select group of social enterprises with underrepresented founders.


Cohort members will be typically at pre-accelerator, accelerator or growth phases (revenues up to $2 million) seeking strategies for smarter growth and scale. Through advice and services as needed, Velo helps prepare them to raise capital, typically over a three-year period. They have access to advisers, curated services, and peer support.


We partner with each entrepreneur and go on the journey with them, but we don’t get paid until they unlock the capital needed for growth.


Velo receives a warrant for a set amount, for equity in the company at the time of a financing event, typically a capital raise. Founders may opt to pay the value of the warrant in cash at that time instead.


Vstudio also maintains a learning collaborative sharing growth strategies in boot camp style settings, in person and virtual.


More Options When the Time is Right

It turns out, 2019 was not the right time for Velo's client to harvest the wealth built to date in her company. She has spent the intervening years strengthening the revenue streams outlined in that original forecast.


The best reason to prepare for an exit is sometimes that, if you execute your plan to maximize value, the business is stronger. Now she has that many more options for harvesting wealth, including a bigger exit if desired.


The journey has not been easy, but it has been right for her. For us here at Velo, that’s success by all counts.

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