The Failure Rate for Startups

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

The failure rate for startups is high at almost 90%.

Here's a list of reasons why startups fail:

The founders underestimate how long it will take to gain traction in the market.

The startup runs out of cash.

The product fails to find product-market fit.

The competition wins the market.

There are regulatory challenges that cannot be overcome.

The team was not up to the challenge.

The timing of the startup was off.

The founders failed to focus on productive tasks.

Some startups take on too much debt too soon.

The startup is building a product for an undefined market.

Half of all startups fail in the first five years.

Twenty percent of startups fail in the first year.

Less than 10% of founders build a successful startup.

Startups are challenging for many reasons.

The failure rate is high.

Consider these risks in launching your startup.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let's go startup something today.

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For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
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Six Months To Build, Six Months To Sell

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Building a minimum viable product or MVP is a key step in a startup launch.

After some market research, there's an ideation step on what to build.

The rule of MVPs is that it should take no longer than six months to build and no longer than six months to sell.

If you can't build it in six months, then you are scoping the solution too broadly.

It's best to reduce the features and functionality so you can go to market sooner.

It's the customer interactions that count, not the number of features in the MVP.

If you can't sell what you built in six months, then you built the wrong thing.

The key here is to sell it first, then build it.

Show the concept to potential customers and take pre-orders for it with some money down.

This will most likely be at a greatly discounted price.

Instead of focusing on the revenue, look for what the customer finds most valuable about the product.

Customers may say one thing, but paying money indicates what they really want.

Consider these steps in building your MVP.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let's go startup something today.

_________________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

Please follow, share, and leave a review.

Music courtesy of Bensound.

Founder Dilution

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Founders raising funding incur dilution.

Their ownership stake goes down as they raise more funding.

Founders start with 100% ownership.

Each round of funding dilutes them by 25% or more.

On average, founders own 60% after the pre-seed and seed rounds.

After a Series A, they own 45%.

After a Series B, they own 26%.

After a Series C, they own 25%

After a Series D, they own 11%

There are often two to three founders in a startup, so they split this amount.

Investors should consider the impact of dilution on the founder's ownership stake.

If they own too little of the company, they may not find the incentive to carry it to an exit.

Founders should consider funding strategies that are more capital-efficient.

For example, after one round of funding, the company could grow based on revenue and profits alone.

This may take longer, but it will reduce the dilution.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let's go startup something today.

_________________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

Please follow, share, and leave a review.

Music courtesy of Bensound.