Founders Hub Network’s Post

💀Why Tech Founders Face an 80% Failure Rate 💀 I spent some time today with a true OG in the tech founders space, and what he told me was pretty shocking. He told me, “Travis, 80% of all founders fail…” It was truly intriguing to me. I mean think about it, 8 out of 10 founders & their companies will end prematurely, not reach the finish line, heck maybe not even get out of the starting blocks…8 out of 10 fail. Here’s a deeper dive into the reasons behind this high failure rate, focusing on a professional perspective: 1. Lack of Alignment with the Right Investors: The foremost reason for failure lies in not securing the right investors. Finding those who truly understand and believe in your vision is crucial for foundational funding and support. 2. Inflexible Business Plans: Having a robust business plan is essential; however, the ability to adapt and pivot based on market feedback and evolving conditions is equally important. 3. Customer Engagement Oversight: Engaging with your customers provides critical insights that can drive your product’s success. Ignoring this feedback loop can be detrimental. 4. Financial Planning Challenges: Proper financial planning and management are cornerstones for sustaining business operations and growth. Missteps here can quickly lead to a startup’s downfall. 5. Market Need Misalignment: Developing a product that doesn’t meet a strong market need is a common pitfall. Validating your business idea against actual market demands is fundamental. 6. Team Dynamics and Hiring Decisions: The composition of your team can make or break your startup. Prioritizing skill, diversity, and a balance between culture fit and expertise is key. 7. Customer Retention vs. Acquisition: Focusing solely on acquiring new customers without nurturing existing ones can undermine your startup’s potential for sustainable growth. 8. Unique Marketing Propositions: Your startup must differentiate itself through its unique value proposition, not by merely emulating competitors’ marketing strategies. 9. Adaptation to Feedback and Failures: The path to success is paved with failures and the ability to learn from them. Embracing these lessons and being willing to pivot is essential for longevity. It’s a sobering reality but also a call to action for current and aspiring tech founders and investors alike! Reflecting on these points, how can we ensure our founders have a better launch? Share your thoughts below! #TechFounders #StartupSuccess #Entrepreneurship #InvestorAlignment #BusinessStrategy #WolfAndIron

Figuring out your startup's equity and valuation can feel like science. Are you constantly asking yourself: 1. What's my company worth when it comes to funding rounds? 2. How can I keep my team happy with fair equity and pay? 3. How do I attract top talent without blowing my budget? 4. What's the best roadmap for growth that actually makes sense? If you're nodding your head, you're not alone. But who has time to crunch all those numbers? That's where the Stock Option Calculator comes in. 🧮 Want to know how? With just a few simple inputs, you can: 1. See exactly how funding rounds impact your valuation. 2. Find the best way to split ownership among founders, investors, and employees. 3. Understand what investors are entitled to if your company gets acquired. The Stock Option Calculator gives you the essential data you need to make informed decisions about future funding and growth plans. It’s an excellent tool for your startup's equity and valuation. 🚀 Use the Stock Option Calculator now! 👉 https://bit.ly/456QWzH With these insights at your fingertips, you can make smart choices that keep your startup on track and set you up for success. 🎯 💡 Pro Tip: Outgrow empowers startup founders and tech-first businesses like yours with a range of well-thought-out tools for engaging your audience smartly. Use Outgrow to build a similar calculator today! 🌟 #outgrow #calculator #stockoptioncalculator #equity #valuation

“Well, what do you want your startup to be when it grows up??” Founders often ask me how they can justify the amount they’re trying to raise, and honestly, it’s a bit of a jarring question- How do you know what to ask for if you don’t have a plan?! And if you have a plan, then that’s your justification!! However, it’s all too common for founders to simply think “well, it’s a Seed round, so I should ask for…$2m…?” 👎👎👎 Any decent investor will sniff out the BS in a heartbeat. Justification for a capital raise is all about having a plan for what needs to be spent to get to the next big milestone. And founders can only know the next big milestone if they have a vision for the future! What do you want your startup to be in 7-10 years? Now work backwards to figure out what you need to do in the next 1-2 years to progress to that longer term vision. Need to attract customers to a working platform? Hire marketers Need to improve your hardware performance? Hire engineers Need to get through the first regulatory hurdles? Hire regulatory personnel But founders must understand who / what is needed, and also when it’s needed. These answers can only come from a much longer term vision for the company when it grows up!

Investors assess startups across several critical factors to gauge their potential for success and long-term viability: 🧑🤝🧑 Team: Investors are attracted to a well-rounded, skilled, and experienced team that has demonstrated success. 📈 Traction: Highlight key milestones like product development, revenue growth, customer acquisition, or partnerships to show momentum. 🌍 Market Fit: Clearly define your Serviceable Obtainable Market (SOM) and ensure it aligns with investor expectations. 💡 Value Proposition: Be crystal clear about the problem your startup solves and the solution you're offering. A strong business model with a unique value proposition can set you apart. 🏆 Competition: Define your competitive edge—what makes your startup stand out in the market? Investors want to see how you’ll maintain and grow this advantage over time. 📊 Financials: Investors appreciate reasonable and well-thought-out financial projections. Clearly justify assumptions with data, and show a realistic path to profitability. 💼 The Deal: Outline the specifics of your fundraising—how much you’re asking for and at what valuation. Be transparent about how the funds will be used. 🚪 Exit Strategy: Investors want to see that you have a long-term vision, including a clear exit strategy. Whether through acquisition, IPO, or another route, showing that you've thought about profitable outcomes for investors increases your appeal. #Startups #InvestorTips #BusinessSuccess 🧑💼 Strong Leadership: A startup’s leadership team plays a pivotal role in driving success. Investors value founders who are visionary, adaptable, and capable of executing plans under pressure. 📊 Data-Driven Traction: Investors look for traction backed by data, such as user growth, market share, revenue streams, and customer engagement. 🌱 Sustainable Market Growth: Startups that can demonstrate consistent market demand and future growth opportunities tend to attract more investment. It’s essential to know your Total Addressable Market (TAM). ⚙️ Scalable Business Model: A solid business model that’s scalable and can generate long-term revenue is key to attracting investors. ⚔️ Differentiation from Competitors: To stand out, you need to clearly communicate how your product or service is different and better than others. Investors are more likely to fund startups that have a sustainable competitive edge. 💸 Efficient Financial Management: Well-managed finances are a huge plus. Investors are reassured by lean operations that maximize every dollar raised and show a pathway to profitability without requiring excessive capital. 💼 Clear Deal Terms: The deal terms, including valuation, must be reasonable and transparent. 🛣️ Future Growth and Exit: Planning for the future—whether through acquisition or IPO—ensures investors that their capital will be returned with a profit. Startups that map out a clear, strategic exit plan are more attractive.

Hindsight, Insight, and Foresight: Navigating Your Startup’s Journey As founders, we learn from both our own and others' successes and failures, we execute based on insights into customer problems, and we lead by anticipating future needs and opportunities. That’s why I’m a huge fan of the "Napkin" guides from Point Nine and Astella ( 🇧🇷 for Brazilian founders). They’re excellent resources for early-stage founders, particularly first-time founders navigating uncertainty and information asymmetry. The Napkins were created to support founders during fundraising by showing how key metrics evolve over time. They offer even more than that—they help founders reflect on the transformations they need to lead. Here are a few key questions you should be asking at each stage of your startup journey: 📌 What’s our goal now and in the near future? Whether it’s achieving MVP, Product-Market Fit, GTM Fit, growth, or scaling, clarity on your focus is key. What are the key signals that will tell you when you've reached your goal? What are the actions you need to take? 📌 How will we get there? Who are the key players—your team, investors, and partners? What other resources and organization should you have in place to execute effectively? 📌 When should the resources and organization be in place? Timing is everything. Plan ahead for when you’ll need the right people, capital, and structure to hit your milestones. While your team focuses on the immediate goal, as a founder, you strive to balance the present while also navigating the uncertainties of shaping the future. 💡 Point Nine Napkin https://lnkd.in/gz_v3u3T 💡 Astella Napkin https://lnkd.in/gNAZGC35 #StartupJourney #FounderScaled

“I think many startup founders would benefit from having this ‘big brother’ who’s been through many of the same obstacles and can help steer them through” 👆 Quote from a very pleasant meeting I had yesterday with a really passionate and honest startup founder ☺️ Making the right choices around your tech strategy, build-or-buy strategy, how best to manage and properly utilize your user data and many more things can be a tough nut to crack, if you’re a first time founder and you might not have had your hands deep into the technical parts of such a setup. Partnering with a technical advisor (or fractional CTO) could be a shortcut for you to propel your business forward.

How investors evaluate startups

Launching a business can be tough, but tools needn't be rough! Delve into our guide to find the tools that'll make your startup journey smooth. From managing resources to outshining the competition, we've got the scoop. Don't let success escape your grasp. Dive in and pave your path to glory. Read more 👀 https://lnkd.in/dfe7mXtf

You’ve built your MVP, and now it’s time to scale. But how do you convince investors to back your vision? Here are three key things they want to see: 1. Market Validation Investors need proof of real demand, you can’t fake it. Customers vote with their wallets. Show early traction, such as active users, pre-orders, or beta feedback. Even a small but engaged customer base sends a strong signal. 2. Scalable Business Model It’s not just about your idea, it’s about how you’ll grow. How many revenue streams do you have? What are your operational costs? Investors want a repeatable, scalable model. Highlight potential revenue streams, and markets you can tap into, and back them up with solid financial projections. 3. A Strong Team Investors don’t just bet on products, they bet on people. If they trust your expertise and vision, they’ll be more likely to invest in you. Showcase your team’s strengths and technical know-how, and if you're still building, share your plan to fill key roles. Remember, YOU as the CEO, are the most important salesperson for your startup. Finally, ask yourself: If I were an investor with capital, would I invest in my own vision? Scaling from MVP to a profitable business is challenging, but with the right strategy, structure, and process, you can secure the funding you need to grow. Let’s connect if you’re looking to refine your pitch and raise your next round! #techstartup #raisingfunds