Finance:Business builder

A business builder is a business model to promote self-sustaining revenue growth of early stage tech startups, involving sales and marketing, strategic and operational support, as well as admin and legal. The model aims to fill a gap in the market between accelerators, business incubators and traditional funding models, such as Venture Capital or Angel Investment. The focus of the business builder is to develop a go-to-market strategy to drive sales and marketing, allowing the startup to generate revenue earlier on, letting the technical founders concentrate on product development.

The main differences between business builders and accelerators are:

• An accelerator is a fixed term program ending with a demo day or pitch event - a business builder engagement with a startup ends with graduation when this is self-sufficient (i.e. generating enough revenue to sustain a rounded team on its own P&L), there is no fixed timescale
• An accelerator provides experts/mentors to give the startups advice; a business builder provides an operational team of experts that creates and executes on the commercial plan alongside the founder/s
• The application process in accelerators is open to anyone, the business builder usually focuses on one specific vertical in the market
• While accelerators provide capital to startups in exchange for equity, the business builder provides operational support to startups in exchange for equity
• Instead of charging up front fees, the business builder only receives commissions based on sales the businesses generate, whereas accelerators charge a joining fee

For the business builder model to be successful and become a self-sustaining infrastructure, the startup must have a product or service capable of generating revenues on a consistent monthly basis. For this reason, the model has proven to be more appropriate for B2B technologies.

History

The business builder model was pioneered by The Sandpit, headquartered in London, United Kingdom. The model was devised by Simon Campbell, a British serial entrepreneur, who founded The Sandpit in 2010. The Sandpit focuses on tech startups in the B2B digital marketing vertical.