When we started our SAAS expense management startup Xpenditure 10 years ago (now Rydoo), we were fortunate to be surrounded by experienced entrepreneurs from day one. Their ad-hoc guidance was invaluable and kept us focused on the right things, which enabled us to pivot within the first nine months from prepaid payment cards to a leading expense management SAAS solution claiming billions of euros around the globe.
Recent studies prove that startups are seven times more likely to raise investment money and three-and-a-half times more likely to grow user numbers for their products and services if they have experienced mentors. According to a study by UPS, 70% of mentored businesses survive five years, twice the survival rate of non-mentored businesses.
There are several options for mentorship available. A quick comparison zoomed in on entrepreneur-led and program-led mentorship:
As mentioned above, program-led mentorship usually means that the startup is surrounded by experts on very specific topics. During marketing week they speak to marketing experts, during product week they speak to product experts, etc.. Through these topic-focused sessions, the startup founders develop their hard skills. This will come in very handy throughout the whole startup lifecycle as, especially in the early days, founders have to be able to jump in on any challenge that gets thrown their way. These programs are often built around the topics, instead of around the startup, which results in general but more theoretical knowledge building.
Entrepreneur-Led mentorship means that there is no program at all, just everyday ad-hoc mentorship by someone who has gone through the ride before.
To be clear with experienced entrepreneurs I mean founders that have already grown a startup to a business of at least 2 million ARR, experienced double-digit monthly growth over longer periods of time, and had a successful merger/exit or built a profitable recurring business.
At Pitchdrive, we believe that close, ad-hoc mentorship by experienced entrepreneurs impacts growth the most.
We believe that mentors, who achieved success as founders and went through the ride already, are unique in that they have the ability to push you to pivot when necessary and have the perseverance to work on the idea until their intended goal is achieved. Rather than surrendering to obstacles and influences that upend progress.
"We've seen firsthand how effective our direct support models can be for startups," says Artur, one of our portfolio founders. "After two years of Pitchdrive, we are proud to see that 70% of the companies in Fund I have already raised a follow-on round (and counting). This success rate is significantly higher than the normal average of 40% for (pre)seed funds. Our direct support models have demonstrated that ad-hoc mentorship by vetted entrepreneurs is a crucial factor for success."
We believe that this real-time access to experts is helping to create a more successful business and increase the chances of success, as well as emotional support which can be beneficial for entrepreneurs in high-pressure and stressful environments.
We use our experience from previous ventures to solve challenges in real time. It doesn't mean that we know every answer immediately, as every startup is different, but it means that we take the time to sit together and figure it out direct, combining learnings from both the startup founders and the entrepreneurial mentors.
It's clear that accelerators and incubators with more fixed programs are a very valuable addition to an entrepreneurial-led fund like Pitchdrive. It gives more structured and theoretical guidance which can be very helpful for young starters.
The combination of entrepreneur and program-led initiatives can offer a valuable opportunity to understand the perceptions and strategies necessary for a startup to succeed. If both parties work together in harmony, it can mean the difference between learning when and how to pivot and survive on the harrowing path that most entrepreneurs encounter on their journey.
We're always looking for new partners and investment possibilities:
🌱 Pre-seed and seed stage (ticket size 200k-500k)
🏎 Highly product and scale driven
🇪🇺 European focussed
🕸 Industry agnostic