Half Baked Business Plans
There’s nothing worse than going into a money meeting unprepared. If you haven’t put the energy into writing a business plan complete with cogent business description, financial projections, market dynamics, value proposition, feasibility report, product positioning, break-even analysis, competitor analysis and exit plan the people who have the cash will not put the time into evaluating your proposal.
Focusing too much on the Product
It is not enough to convince potential investors that you have invented the next Apple or Tesla. You also need a team that can generate the revenues to repay a debt fund or plans an exit strategy for a venture capitalist. Many entrepreneurs ignore this part & doom their investor-pitch. The greatest Racehorse in the world still needs a great jockey to win a race. The same rule applies to business. Showing that you have recruited a top-notch salesperson, a skilled influencer and even outside experts like a mentor who can supply professional guidance can help to improve your funding chances.
Not Getting Enough Money
Everything will take twice as long and cost twice as much as you expect.While that may be an exaggeration, startups are too optimistic about how soon they can achieve the cash flow. If you are underfunded, then you will not have enough buffer to tide you over in the event of slow initial sales or if there are certain market shocks. A recent survey shows that about 80% startups fail because of not securing enough funds.
Having too Many Investors
One of the drawbacks of taking funds from multiple investors is managing too many relationships and expectation. It takes time away from your core business. These not-so-silent partners may have conflicting interests and the consequences can be devastating.
Poor Cash Flow Management
Most new business owners burn through their seed money and fail to reach cash-flow positive in a timely manner. Unnecessary spending & highly optimistic income forecasts are like inviting disaster. Financial Investors won’t forgive that sort of mismanagement & lead failing to secure a second round of investment.
Nithin Sai-(Serial Entrepreneur)
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