How Relationships Trump Revenue in Early-Stage Venture Funding

According to Inc., Devin Patel, a 31-year-old entrepreneur with previous experience growing hostels in Barcelona and working in business development at a mobile payments startup, founded Miami-based Onbrand in 2023. The company initially launched as a digital platform for corporate events before Patel pivoted to focus on building a network for brand partnerships. Less than a year after founding, he successfully secured venture capital funding despite the company having no revenue, primarily through developing a strong relationship with an investor. This case highlights an increasingly common path to startup funding that doesn’t rely on traditional metrics.

Why Relationships Often Outweigh Revenue in Early Rounds

What Patel accomplished reflects a fundamental truth in early-stage venture capital: investor confidence often hinges more on the founder than the current business metrics. For pre-revenue companies, VCs are essentially betting on the entrepreneur’s ability to execute, pivot when necessary, and build something valuable over time. This explains why experienced founders with track records—even in different industries—often find funding easier to secure. Patel’s background in business development and previous entrepreneurship experiences likely signaled to investors that he possessed the resilience and strategic thinking needed to navigate the uncertainties of building a startup company from scratch.

Strategic Pivoting as a Strength, Not a Weakness

Patel’s shift from corporate events to brand partnerships demonstrates a crucial founder quality: market responsiveness. Many investors actually prefer founders who demonstrate the ability to recognize when an initial idea isn’t scaling as expected and pivot toward larger opportunities. The brand partnership space represents a significantly larger market than corporate events alone, and investors likely saw this pivot as evidence of Patel’s strategic thinking rather than indecisiveness. This ability to adapt is particularly valuable in today’s fast-moving digital landscape, where business models can become obsolete quickly.

The Unseen Dangers of Relationship-Based Funding

While relationship-driven funding can bypass traditional hurdles, it carries significant risks that both founders and investors should consider. Without revenue traction, there’s no market validation of the business model, meaning the entire investment thesis rests on assumptions rather than data. This approach also creates power imbalances where founders might feel pressured to maintain the relationship at all costs, potentially making suboptimal business decisions to avoid disappointing their primary backer. Additionally, the lack of revenue pressure can sometimes lead to extended runway without meaningful progress, creating what investors call “zombie startups” that survive but don’t thrive.

Miami’s Emerging Tech Ecosystem

The Miami location factor shouldn’t be overlooked in this story. Over the past several years, Miami has been actively cultivating its reputation as a tech hub, attracting both entrepreneurs and venture capital from traditional centers like Silicon Valley and New York. This geographic context matters because emerging ecosystems often operate with different funding dynamics than established tech hubs. Investors in growing markets like Miami may be more willing to take relationship-based bets to help build the local ecosystem, whereas Silicon Valley investors might demand more concrete metrics even at early stages.

What This Means for Aspiring Founders

Patel’s success story underscores the enduring importance of network building in entrepreneurship. While having a great idea and business plan remains important, the ability to cultivate genuine relationships with potential investors well before needing funding can be equally crucial. This approach requires a long-term perspective where founders engage with investors as thought partners and industry contacts rather than just sources of capital. For founders without extensive networks, this case highlights the need to strategically build relationships through industry events, introductions, and demonstrating domain expertise long before the fundraising process begins.