Startups Fail for Many Reasons

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

Startups fail for many reasons.

Here's a list of the more common ones:

Ran out of cash. This is the most common reason of all.

Could not raise additional funding.

Lost too much business to the competition.

Did not generate enough revenue to make the business model work.

Had a too-high cost basis for running the business.

Didn't hire the right people.

Missed the market opportunity.

The founders could not get along with each other.

Lost interest in the business.

Review this list for your startup.

Consider how to mitigate these risks in your business plan.

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

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The Challenge of Angel Investing

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

Angel investing can be a rewarding experience, providing not only investment returns but also making the world a better place.

It also comes with challenges.

Here is the challenge of angel investing:

There's a small number of investable startups.

There's a large number of startups to comb through to find the fundable ones.

There's a substantial number of other investors chasing startups to invest in.

This creates a competitive environment for the best deals.

Most startups genuinely want to succeed, although there are a few that are outright scams.

The process of sorting through the available startups takes time and energy.

One can't always tell a good one from a bad one from a general review.

It takes a deep dive to figure out which startups have the potential to succeed and which ones are destined to fail.

Failure comes from pursuing a market that is too small or building a business that is not scalable, among other reasons.

Consider how to mitigate this challenge in your angel investing.

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.

What Are the Odds?

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

Early-stage investments require follow-on funding to reach a substantial size, providing a return to the investors that justifies the risk.

Here are the odds that a startup will raise its next round of funding.

After the first round, about half go on to raise a second round.

This is not unusual, as many investors divide their investment allocation in half for the first investment.

Of the original funded companies, about 30% will go on to raise a third round.

This is equivalent to a Series A round.

Of the original funded companies, about 15% will go on to raise a fourth round.

This is equivalent to a Series B round.

Of the original funded companies, about 9% will go on to raise a fifth round.

This is equivalent to a Series C round.

Of the original funded companies, about 3% will go on to raise a sixth round.

This is equivalent to a Series D round.

After the first round, there is a halving effect in which approximately half the companies are able to raise another round to move to the next level.

Overall, about 70% of the companies will not make a return to their investors due to a lack of an exit.

Startup investment is driven by the power law, which provides the majority of the returns through a handful of the investments.

Consider these odds when making your investment.

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.