Comparing value creation in start-ups and scale-ups

Startups are extremely important to the ecosystem, and we want a lot more entrepreneurs taking risks.

But there are also other paths besides direct entrepreneurship. The narrative we’ve been told so far is that the only "cool" thing to do is to become an entrepreneur or to join a small start-up.

I wanted to share a more nuanced reality in this post. It comes from the fact that I’m interviewing a lot of people out of school, and so many of them want to become entrepreneurs without having a clear vision of what they want to achieve. This is obviously totally fine and I love the raw energy.

I felt it was important to share an alternative narrative that is unknown to most people.

Indeed, if you’re a talented, ambitious person, today’s startup ecosystem seems to whisper the same thing to everyone: “Go build your own unicorn.” 

The allure of founding a company, or joining a tiny team at inception is strong. The promises of early equity and the thrill of creation are everywhere. 

Young graduates want to join early/create their company because (i) they want their own ideas to shape the world, (ii) they want to be in control/have ownership-power and (iii) it can be a source of real financial gains.

But here's what the ecosystem forgets to mention: joining proven scale-ups like Alan could be one of the smartest entrepreneurial moves you'll ever make. You can have a lot of ownership, learn like nowhere else, and create 10x the tangible value compared to starting up.

The harsh reality is that 90% startups don’t make it, and less than 1% of them ever become unicorns. Even among the most talented founders, very few generate meaningful outcomes. That should not stop anybody from trying though (it didn’t stop us 🙂).

At companies like Alan (there are others but I’m speaking about what I know the best), you get to see behind the curtain of a company that's already cracked the code: product-market fit, sustainable growth, international expansion. You'll understand what actually moves the needle versus what just feels important.

Spotify’s Founder Daniel Ek said, at a talk, that the first 10 years are foundation building, the next 10 years are the ones where you see the compounding effect. Spotify was valued around $8bn in 2016 (after 10 years) and they are now worth $130bn, 9 years later. It is $122bn of equity value generated. 

There’s a myth that “early” always means “more equity, more upside.”

In truth, a small slice of a company that never reaches product-market fit is worth nothing. 

At successful scale-ups, equity is an asset with tangible, growing value. Many of our employees (early or not early) have already seen more financial upside than if they had chosen to start-up on their own.

Here is an email we received recently from an ex-Alaner:

So what’s the difference? Actual liquidity. While startup equity remains paper promises, Alan provides secondary market access where shares convert to real money. 

Startup equity pools get decimated by liquidation preferences and down rounds. Most start-ups don’t give liquidity, you have 90 days to exercise your options when you leave (vs. 7 years at Alan). It is important for candidates to understand this. 

On Alan’s side, we already provided liquidity events (more than €40 million of it) for Alaners and ex-Alaners. Some Alaners have even used their gains to fund new ventures and adventures 🙂

Early-stage companies often sell “autonomy,” but that comes with zero support, zero processes, and a lot of chaos.

Learning how to become an entrepreneur isn't just about being an autodidact (but learning from the best through experience. The lessons from my first start-up, Expliseat, helped me be so much better at building Alan.

If you want to become an entrepreneur, you can do it the hard way with the risk of stalling for years with a small project. Or, you could come learn here with the best and see what processes, scaling, culture and ambition means.

At Alan, you get huge autonomy along with world-class mentors, a proven system, and a culture that gives you leverage. You’re empowered to own real projects, move fast, and learn from the best. You're not just learning by trial and error; you're absorbing the instincts of Europe’s best operators, technologists and leaders who've already solved the hardest problems. 

There are other companies like us. The goal is to identify the next Amazon, Google, Nvidia or Meta and join when they still have a lot of upside ahead of them. I recommend places where the first generation of employees are still around, those who have learnt scaling the hard way.

For example, we currently hold less than 2% of market share in the countries we operate in. There’s still plenty of room to grow as Alan scales across Europe and beyond. When you see the growth of Revolut in the last few years, you understand that sky is the limit. Mistral is building a global business at an unprecedented pace.

It’s the best of both worlds - all of the upside, with a fraction of the risk.

That is why many successful Alaners actually came from (smaller) entrepreneurial projects and are having incredible success. It is also why Alan is an amazing school for aspiring entrepreneurs, and we have many of them building their own company after their journey with us. We are so happy to support them as well. 

It’s tempting to chase the founder’s dream or join the next “garage unicorn”, many should do it (I personally did).

But the data, and our own experience, show that the best place for ambitious talent to maximize their impact, learning, and reward today is also at companies at the stage of Alan. This is how you break the success rate ceiling. This is our shared opportunity to build a global champion by channeling the best talents in category-defying companies.