Startup Professionals Musings

OCTOBER 1, 2012

Based on my experience as a mentor and an entrepreneur, if you fail on your first startup, you are about average. That’s not bad, but who wants to be average? Every young entrepreneur knows implicitly that startup success is a long hard road. Statistics show that the failure rate for new startups within the first 5 years is as high as 50 percent. How can you improve your odds?

Intellectual Property 274

Intellectual Property Entrepreneur Viral Early Stage 274

Startup Professionals Musings

SEPTEMBER 29, 2012

Every so often a promising entrepreneur seems to freeze in the oncoming headlights and gets run over by his competition. Why is it that his idea which seemed so fundable only months ago fails to attract investors today? The team is the same. The company's market is the same. The only difference might be the start of another recession like the last one, resulting in lower liquidity and investors with no money, and that makes all the difference.

Entrepreneur 242

Entrepreneur Demand Business Plan Product 242

Startup Professionals Musings

OCTOBER 3, 2012

It seems like everyone has an Internet startup these days. The cost of entry is so low – you can create a web site for almost nothing - and you are on your way to riches with ecommerce, your latest invention, or personal services. But the low cost also means that your competition will also be there in force. Mashable claims there are 150,000 new web sites created per day.

Internet 241

Internet Social Bookmarking Social Media Startup 241

Startup Professionals Musings

SEPTEMBER 30, 2012

Many entrepreneurs still dream of “going public,” making billions of dollars, and playing with the big boys. They don’t realize that this option would likely be their worst nightmare, since it costs millions for the road show, usually dilutes your equity to a tiny fraction, and takes away all your entrepreneurial control. Consider the recent example of Facebook and Mark Zuckerberg.

Exit Strategy 239

Exit Strategy IPO Investment Bankers Entrepreneur 239

Startup Professionals Musings

OCTOBER 5, 2012

I still get business plans, looking for an investor, that say all too clearly that the primary “use of funds” will be to do research and development (R&D) on some promising new technology, like superconductivity or cancer cures. Investors are looking for commercial products to make money, rather than R&D sunk costs, so your investment hopes are sunk as well.

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Warrant Angel Investor Early Stage Distribution 224

Startup Professionals Musings

OCTOBER 2, 2012

Most entrepreneurs think that risk is just an “occupational hazard” that can be minimized or eliminated by a smart businessman. That way of thinking is simplistic and wrong. In reality, some risks are good and should be embraced for growth and a competitive edge, while others are bad and should be avoided completely. Traditional risk management focuses only on bad risks, and seeks to contain losses.

Forecast 257

Forecast Viral Social Network Business Model 257

Startup Professionals Musings

OCTOBER 4, 2012

Many investors will assert that company culture trumps strategy every time, in predicting the long-term success of a new startup. Obviously, both are important, so it behooves every entrepreneur to start early in setting the right tone for his own company, and every new team member should be gauging both of these relative to their own interests, prior to signing on.

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Startup Matching Leadership Employee 222