Why are some startups in "stealth mode" if ideas are worthless. And how do they raise money from VCs?


2

At any given point, there are many VC funded startups in stealth mode.

  • What's the benefit of being in stealth if "execution is everything" anyway?
  • How do VCs justify funding such a startup since they have zero traction?

Venture Capital Investors Startups

asked Feb 26 '14 at 13:00
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Antonio Comer
130 points
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1 Answer


2

There are two kinds of startups in stealth mode:

1) Side projects by people who think someone will steal their idea - likely to fail sooner or later.

2) Proven entrepreneurs doing something "special"

"Special" could mean that they are doing something extremely radical, or that they are working on something that's pretty obvious and requires great execution and first mover advantage in order to get a good enough run for success.

Twitter and Medium are both examples of this - at a small scale, they're fairly simple to (re)create. At a large scale they're both complicated and complex.

Twitter required first mover advantage to be dominant.

Medium required stealthiness in order to work and rework the interfaces and figure out the real value proposition (writing for a community of readers).

answered Feb 26 '14 at 13:19
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Nick Stevens
4,436 points

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