- Advertisement -Newspaper WordPress Theme
EdTechStartup Myths: Hard work Equals Success

Startup Myths: Hard work Equals Success

How can you bridge the gap between the agility of a company in the early stages and the associated fragility? Anyone who founds or invests in a start-up knows that no matter how good the idea may be, not every start-up is successful. The decisive question is how can the bridging between the agility of a company in the early phase and the associated fragility succeed?

Every business start-up is also a learning experience. But how does an exit succeed, what makes a start-up successful?

Founders become an integral part of the concept

As a first step, founders should understand that when they become part of a venture or accept money from a VC, they become part of that company’s investment model. It may sound harsh, but in the world of capital there are some simple rules. As a founder, you therefore need to understand a few basic calculation models. When it comes to financial success when founding a company, the key question from an investor’s perspective is: How do the founders maximize value and minimize our risk?

Important: This is about more than just the financial risk. Because the risk and the value derive from the founding team. It also refers to the market in which the start-up operates. For example, if a company has a founder with a wide network of potential customers, it reduces the risk of not finding customers while increasing the company’s potential value.

The level of risk, but also the added value they can deliver, differs depending on the type of venture and investor. For example, we have a team of IoT experts – one of our core areas. Consequently, if a start-up needs expertise in this area, we can reduce the risk – and also create added value. Conversely, an e-commerce start-up would mean a higher risk for us. For us, the risk for a start-up that does not have in-depth IoT knowledge would be lower than for an investor who does not have any expertise in it. Therefore, expertise matters a lot.

From a market perspective, it’s all about trends. A growing market that is moving quickly is generally better for early-stage startups than slower or declining segments. As far as the targeted markets are concerned, one should definitely focus on smaller target markets in the start-up phase, which are easier to reach across the board than large ones.

The right choice of partners and network

Inspiration and passion are great, but it’s equally important that founders have relevant experience. The best evidence of this is a strong network and knowledge of the market. NBT has a large pool of experts and a broad ecosystem. However, not so broad that we know every industry in detail or can show ten years of operational knowledge from a niche area. We know how we acquire this knowledge, but we find people who bring the expert knowledge for a specific area with them all the more exciting.

As a company builder, we therefore offer a platform that is attractive to founders with such knowledge. These people usually come with the ability to accelerate and expand our process. They save us time and money and are therefore easier to incorporate into our plans. That means such founders and we go well together. When founders are looking for partners, it shouldn’t just be about financial investments, but about mutual consideration of what values ​​you bring to the table and whether you can reduce risks together.

Develop financial models

No start-up is equally strong in all areas. It is our job to recognize these risks and not to cover them up. Some risks are explicit. But some are nuanced. In this case, models form a good basis for assessing and minimizing these risks – especially in the financial area. When it comes to financial models, I recommend these three types:

Worst conceivable but survivable scenario – this is the minimum scenario we need for a company to survive. When even that seems too difficult to achieve, the business becomes a high risk.

Best case achievable scenario – this is what the business will look like if everything goes well. If the value is too low, it might not be worth continuing.

Target Scenario – this is a case between the other two where some things work and others don’t. This should be the main plan, with tweaks to adjust.

Conclusion

Learn more about the risk and reward factors that define investment models; creates value in and draws insights from your network before founding. Having done these, you need to approach the planning of your project with precise forecasts. Don’t hide from unpleasant things – or numbers.

- Advertisement -Newspaper WordPress Theme

Latest article

- Advertisement -Newspaper WordPress Theme

More article