New Business Model for Supporting Start-ups
AS-Accelerator built a new business model to support start-ups.
The term “start-up”, specially in Japan, usually implies great difficulty. Even if you have a great idea, you hesitate to start-up because of the anxiety of not having a job, nor income, plus capital shortage for development and SGA. In an academic context, we call those daily cost as “Burn Rate”. For seed or early stage start-ups, the Burn Rate is big headache. They have to manage it while struggling for survival until profit comes up organically from the business model itself. In reality, many and many Start-ups “Burn Out” as they can’t survive until the proper momentum shows up.
AS-Accelerator seeks to solve this ” Burn Out” problem through a new business model that encourages entrepreneurs to start their own business!! Let’s dive into a new World!!
In our business model, the entrepreneur becomes an employee (or contractor) of the investors while they develop the new business. However, not fully employed, an entrepreneur could also work as a freelance business developer.
In traditional venture capital, an entrepreneur founds a firm and raises capital from several sources (investor, banks, or even the Three Fs(Family, Friends, Founders), and they must manage all finance by themselves.
This business model helps entrepreneurs who have great business ideas but are hesitant to start up because of the Burn Rate.
An investor may not take equity, but they pay salary and development costs for the entrepreneurs when they compensates the business idea to the investor. Of course, investors and entrepreneurs build a close relationship based on co-working and collaboration to help the business develop and fully agree on future earning for both sides upon exiting.
In shot, an investor and an entrepreneur form a team to develop new business.
If the business advances to early or second stage, the investor could exit the investment. If the business already has got enough traction to attain self sustained growth, the team incorporates new company and looks for new investors who like to take equity as series B. (ie: VC, CVC, or Big firms) The investors could either sell all holding shares out to series B investors or stay as shareholders in the second stage. Moreover, if the business could grow by itself, the team keep running as own business.
When more challengers show up in start-up industry, innovation will be accelerated in Japan, and then it will be a great power for future growth for Japanese economy.
Join us and let’s start our voyage!!