Why are so many start-ups failing?

Underfunding

Especially with lofty goals, startups need moneyfirst.This money must be delivered by the founders, as a starting investment, or given by investors. Venture capitalists are often (Venture Capital) involved.

When it comes to self-financing, especially for young founders, it is excessively underestimated how much money is actually needed for day-to-dayoperations.Without a finished product that produces money, the company burns capital every second.

If debt capital is collected, then simply too little isrequired.For large venture capital firms, it doesn’t matter if they invest €50,000 or €3,000,000 in the company. On the contrary, it may even be that it is more likely to get the larger sum, since the ROI (return of investment) only makes sense for the investor if he enters witha larger investment sum.

Just asking less from the investor may have been the death of the startup before it even started.


Poor staff

Many founders are young, ambitious, and unfortunately completely haphazard.

They either overestimate their abilities or hire people who also don’t have the skills they need.

This is not unusual or rare in itself, but especially with a team leadership that is notclear, a single misfit can jeopardize the whole startup.Especially with scarce capital, a 12-month-old employee who is wrong can completely destroy the resources without delivering results.

Here, investors often do not want to take any risks and implement a recruiter or a CEO into the start-up.This is usually non-specialist and can detect even worse right skills in personnel than the young inexperienced founders.

The result is a startup where everyone thinks they are working with the right people on the right product, and have all done everythingright.Disaster.


No end strategy

Where should the journey go? Is only a new technology produced here, which is then sold completely to a large company, or is a product to be produced ready for the market, which is then sold in-house?

This clear end strategy must be there from the outset. How do we end up with money?Who has this money? How do you get it for the performance of the start-up?

Ideally, the final strategy should be worked out before you even start, and then only be corrected in the course of the work. If it turns out that the market does not accept ourproduct, but we have produced valuable technologies on the way to the final product that other companies would like to buy up, you can just make a so-called pivot and a new one. monetization solution by selling, for example.

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