This depends on how you define “startup”. Is a college student who advertises his dog-walking services a startup? How about one who spends nearly full-time developing her iPhone app? A real estate developer who incorporates to buy a piece of land in which to build a building?
Each year in the US there are likely tens of millions of individuals starting up something (like a dog-walking service or an iPhone app) on their own. Read more
Image via Business2Community.com
All true entrepreneurs operate off a set of tenets that are built into their psyche, or drilled into them from training and mentors. These are represented by sayings like “You never get anywhere unless you take a chance” and “Passion and persistence are the keys to success,” Unfortunately, there are still other old, reliable tenets that don’t work anymore.
In a book a while back by Jeanne Liedtka and Tim Ogilvie from the Columbia Business School, “Designing for Growth,” the authors encourage managers to think more like designers. I assert that designers have a lot in common with entrepreneurs, since both must innovate and start a deep understanding of what their customer really wants (“customer-centered”).
In most other respects, design thinking is the opposite of business thinking. For example, businesses must deal with reality as fixed and quantifiable, whereas design deals with subjective experience and a social constructs. Entrepreneurs need to bridge both these worlds, and I believe the authors outline the key business management myths that limit startup thinking: Read more
A) In a capitalist economy, because they seek to generate an economic return in the form of fungible cash that can support their personal needs and desires.
B) In many cases because they find it fulfilling and a good match for their skill sets, just as artists, dentists, lawyers or competitive athletes finds it fulfilling to go into their respective fields.
*original post can be found on Quora @ http://www.quora.com/David-S-Rose/answers *
One of the following two:
Revenue-backed, interest-bearing notes with a kicker multiple
The funds go into the company as a loan, and get repaid with interest by distributing a fixed percentage of gross revenues (say, 5%) among all the note holders. Once the base+interest has been returned to the investors, the company continues to pay out a percentage of revenues (perhaps at a lesser figure, say, 2.5%) until the investors have received a fixed multiple of their original investment (say, 5x). At any time, the company may retire the note(s) by paying off the base+interest+5x kicker.*
Some sites will use a similar approach, but limit the repayment by time (say, 5% of revenues for the first three years) rather than a multiple of the investment, but this is problematic for a number of reasons. Read more
Image via McCombs.UTexas.edu
There is no substitute for diving into the key details of a new startup. Executives from large companies have sometimes long forgotten how to do this (“My people will contact your people to work out the details.”). Others hire consultants, or outsource much of the real work. These executives won’t survive long in a startup environment.
An obvious reason is limited funds, but a more important reason is the need to know and intimately understand what is really going on in the business and the market. A diligent entrepreneur should certainly work the important details for his or her startup, especially when it comes to assessing any negative fluctuations in the business.
In his book, “Out-Executing the Competition,” seasoned executive Irv Rothman provides tips to corporate executives on how to dig in and “get their fingernails dirty.” I’ve taken the liberty of extending these for entrepreneurs, based on my own experience: Read more
Unfortunately, none of this data exists. Period. The reasons are (a) there is no such thing as an “average” angel investor, and (b) there is currently no way to track the activities or record of individual investors.
That said, the rough ranges would be as follows: Read more
Image via TheConversation.com courtesy of Flickr/Alex.E.Proimos
If your first startup fails, you are about average. Most entrepreneurs fail on at least one attempt. Investors agree that an entrepreneur who has never failed probably hasn’t pushed the limits. What investors look for is not that you never fail, but that you learn from the failure, maintain a positive attitude, and work with integrity on the next one.
According to Harvey Mackay in his book “Use Your Head to Get Your Foot in the Door,” how to rebound from failure or rejection is an essential skill to acquire for success. His bullets are about job hunting, but I believe the principles apply equally well to starting a business: Read more