The country appears to be in a start-up frenzy and a casual look at the stories in the media of mega valuations and funding deals, would have us believe that, it is raining dollars from the moment you hang up a sign board announcing the start of your business. I am besieged by young MBA’s, midlife executives, children of businessmen, housewives and people of all stations of life looking for the mega funding deal because they have an IDEA!
Those who are already entrepreneurs, read these media articles with a mixture of awe and cynicism as they have been running around chasing funding options for years and are befuddled as to how and on which planet these deals happen?
Here are Ten Reasons Why your Start Up Wont Get Funded:
- Every IDEA is not a business, let alone a scalable and profitable one
- Ideas are useless on a standalone basis; it is execution that counts
- Almost 90% of the start-ups fail in the first two years
- More than 95 % of the start-ups are funded through personal funds, family or loans
- Angel investors invest in approximately one out forty curated proposals
- Venture capital funding is normally for the very large, very scalable, well managed and very profitable businesses
- Every overnight funding story you hear has a ten to fifteen-year work in progress story behind it
- Media hype is just that. Hype. Let’s take the hype about India having the third or fourth largest number of start-ups in the world currently. What would interest you is that we are still behind Israel, a country smaller than Kerala and a fraction of its population. Further, even if we climbed to number two, the gap between USA the number one country and India would be ten times!
- Media reports extreme events only. Most of reality and life lies in between and unreported. Behind the mega paper valuations are realities that you cannot comprehend
- Investors are not fools walking around with suitcases full of cash. They are extremely well informed individuals who can cut through the nonsense of a typical pitch in a few seconds. Remember they have money because either they spend at a rate slower than they earn it or / and they are extremely good at finding great ideas at a low value
So is it all gloom and doom? Not really. The facts, economic environment and social conditions are in favour of a start-up boom but you are never going to get funded if you chase the glamour and the money.
There is an art and science to getting funded but it cannot happen in isolation as a binary event. From the time you have an idea to its ultimate execution is just one part of the journey. The bigger journey is nailing down your values, vision and goals that get reflected in what you build. Investors are extremely sharp when it comes to reading entrepreneurs and the wannabe’s and fakes don’t make it and spend a life time wondering why? No investor actually tells them why; invariably it is a handshake with a smile and “we will get back to you”. A lot like a failed first date.
So stop scurrying around like a restless squirrel and spend time learning deep and wide about what it takes to be a successful entrepreneur and what an investor is really looking for. Focus and get guided through a step by step easy paced understandable process to achieve the destiny you believe is yours.
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