To address this, I've come up with a new funding model called the Asset-Secure Venture Capital.
This new funding model solves two critical problems: VCs losing billions of dollars worth of investments on failing startups (with 90% of startups eventually failing), and talented operators and ambitious founders remaining stuck at day jobs because they can't build a corpus that would give them the necessary financial runway to build their vision.
Pouring millions into established companies to retrofit them for AI era is not the only solution. VCs should consider enabling the next generation of entrepreneurs who are building with an AI-first approach from the ground up. These solo innovators often need different support structures than traditional startups.
Asset-Secure Venture Capital: How it works?
The Asset-Secure VC model operates differently from the traditional VC funding approach:
-
Capital preservation with income generation: Instead of handing over $2 million to be spent, the VC places that capital in a fixed deposit or similar investment vehicle. This generates a steady monthly interest—approximately $2,000—which flows directly to the founder, covering their essential living expenses.
-
Limited operational budget: Alongside this stability, the VC provides a modest operational budget of $20K-$50K annually for business essentials: software tools, legal incorporation, minimal marketing, and occasional travel.
-
Aligned partnership terms: In exchange, the investor receives a reasonable equity stake (typically 10–15%) or a share of profits (or a carefully structured combination of both).
This arrangement creates a dramatically more sustainable relationship between capital and revenue generation.
Benefits
For solo founders:
-
Financial liberation: The steady interest income gives founders the freedom to quit their jobs and dedicate themselves entirely to building their vision without personal financial stress.
-
Complete focus on product and market: With a smaller, more intentional operational budget, founders avoid the trap of premature scaling and can laser-focus on developing product-market fit.
-
No pressure to "scale at any cost": The extended runway from interest payments means founders can build more deliberately, without the constant distraction of fundraising rounds.
For Venture Capitalists:
-
Principal protection: The core investment remains intact in secure financial instruments, dramatically reducing the risk of total capital loss—a refreshing change from the "all or nothing" traditional model.
-
Better control on portfolio performance: After predefined periods (typically one year), VCs can evaluate progress against agreed milestones and decide whether to continue the arrangement, potentially increasing support, or withdraw their capital.
-
Portfolio diversification: This model allows VCs to back more solo founders with the same amount of capital required to fund a traditional startup, increasing their chances of success.
What does the market say?
The numbers powerfully illustrate why we need to rethink VC funding:
-
In the United States, there are 41.8 million one-person companies, contributing over $1.3 trillion to the economy annually.
-
Several solo-founded companies have cross $10+ million in annual revenue (going as high as $300 million), demonstrating that individual entrepreneurs can build massive value when properly supported.
-
Studies consistently show that startups with controlled early spending and a focus on sustainable growth outperform those that rapidly deploy large capital infusions before finding product-market fit.
This data reveals an enormous, underserved market of founders who are overlooked simply because they operate independently rather than as part of conventional founding teams.
Real world implementation: Athena's approach
One organization already pioneering aspects of this philosophy is Athena.vc. Their model offers valuable insights into how new funding approaches can succeed:
-
Centered around financial independence: Athena provides $30K–$50K investments designed specifically to cover founders' living expenses—conceptually similar to the interest-based support in the Asset-Secure VC model.
-
Hands-on support: Beyond capital, Athena offers a 6-month "residency" with direct mentorship from accomplished entrepreneurs like Rob Liu, providing guidance on ideation, MVP development, and sustainable growth strategies.
-
Inclusive investment thesis: Solo founders are welcomed, even at the idea stage without traction—a stark departure from traditional VC requirements that often demand co-founders, existing revenue, or user growth.
Athena's track record demonstrates that this founder-friendly approach isn't just idealistic but can produce remarkable results. Their portfolio includes numerous founders who've built multi-million-dollar businesses while maintaining significant control and equity.
The Future of entrepreneurial funding
Asset-Secure Venture Capital and similar models like Athena's represent more than incremental improvements—they signal a fundamental paradigm shift in how we fund innovation:
-
Better incentive alignment: By separating living expenses from business capital, founders can prioritize creating sustainable value rather than artificial growth metrics.
-
Democratized access: This model opens entrepreneurship to diverse talent previously excluded by financial barriers, including those from underrepresented backgrounds or geographic regions.
-
Focus on founder health: By removing existential financial stress, these models promote founder well-being and sustainable company building—addressing the mental health crisis plaguing the startup ecosystem.
By focusing on people rather than headcount, the Asset-secure venture capital model ensures that the capital is used to help talented individuals create world-changing companies.