Archive for the ‘entrepreneurship’ Category

Why Startups don’t make it past the 5-year mark

Tuesday, August 10th, 2010

The German Federal Ministry of Economics and Technology requested the Centre for European Economic Research (ZEW) to carry out a study on why young companies fail within the first five years of their existence.

The study looked at 3000 companies that closed down between 2006 and 2009. Almost three quarter of these companies at some stage were making a profit, which goes to show, that the study did not only analyze companies without a marketable business model.

The study found out that the main reason why startups do not make it, is that there was insufficient seed capital. Further reasons can be found in unexpected market changes and strategic miscalculations. Thus, companies should make sure they have enough money to sustain their startup and they should be flexible so they can adapt to any market changes.

The Full Study can be found here (only in German): http://bit.ly/9pC6qR

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Posted in Venture Capital, entrepreneurship, start-ups | No Comments »

4 Important Factors when Raising Funds

Thursday, July 8th, 2010
  1. Market. This is possibly the most important factor to consider: is there market demand for your product? If there isn’t you will have a chance even with a mediocre product, however, if there is already a strong market, even an extraordinary product might not do the trick.
  2. Momentum. You have to continuously show that you are working on your product. You need to have people using your product, not just once, but also coming and a good marketing strategy. This will indicate that you have some traction in the market.
  3. Team. You need to have a reliable team around you. Only hire people you know and that will stand behind your product and work on it with 100% effort.
  4. Naysayers. If people are saying what you are attempting can’t be done, that is a good sign. It means that they don’t know how to do it and as a result you know you have discovered something new.

For a more detailed account please see http://bit.ly/d99jDF

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Posted in Venture Capital, entrepreneurship, innovation | 1 Comment »

The Predicament of the banks

Monday, June 28th, 2010

Many companies have had to cut back on spending during the past year due to the economic crisis. However, this year they want to start spending money again, but the banks remain reluctant to readily give out cash. They have become much more careful when checking the operative cash-flow and the debt of the companies. Thus if you have a high debt and your cash-flow is negative, you have to find a VC, because the likelihood is, that banks will not give you any loans.

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Silicon Valley in Europe?

Tuesday, June 22nd, 2010

The Russian president ordered the setting up of an international centre for technological innovation earlier this year. Through this, he hopes to attract young entrepreneurs and venture capital and private equity companies to the region. Construction on offices flats and labs will be started shortly, just west of the capital Moscow.

It seems that Russia wants to build its own Silicon Valley and it is clear that they are doing their best to attract both capital and intellect. They will be offering low rents, income tax exemptions and other perks to those willing to settle down in the area. The organizers are using the following pitch to attract companies: “Come, live, create and do good for yourself, Russia and the whole of civilization” (WSJ, 2010). For the moment, the main focus will be on ICT, Biotech, energy efficiency and nuclear technology.

If you want to read more on the topic, please visit: http://bit.ly/9IHDyu

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Posted in entrepreneurship, innovation | 1 Comment »