Causes for Decline in Startups Funding | Venture Capital Funding in India | Motilal Oswal

Root Causes for Decline in Startups Funding

Quite a lot of you may fancy the idea of becoming the CEO of a start-up company, the moment you are out of college or after passing out from your high-school, but there is lot more, to starting your own company. It is not as easy as you think just in case you want to become a successful entrepreneur and prove your mettle to the world. Listing main reasons for the decline in startup funding: Ego-boost of young collegiate entrepreneurs Funding a corporate domain and the success rate are never parallel streams. If you want an investment firm to fund your business, you should be a successful marketing exponent or should have proved a reasonable level of growth in your previous business. Else your job profile in previous companies should speak volumes about the kind of work you have done and the feats you might have achieved.   Despite these odds, if you still manage to get funded for your start-up, you tend to get overconfident about yourself. You tend to get very proud and hence you might appear as a haughty person in front of employees, investors, your creditors, customers etc. This way you are spoiling your supply chain or consumer chain management. Hence, ego-boost can be the main reason for the decline. Getting over-enthused with investors Quite a lot of start-up company founders tend to go gaga over investors. Yes, you need investors to fund your company with a sufficient dose of fixed as well as working capital. But that just doesn 't mean you can tend to ignore the others who are trying to add value to your business. These people who are tirelessly working hard to make your company prosper include employees, marketing experts, bloggers, co-founders, investors and ultimately your customers. You need to treat everyone with an equal amount of respect. Not just focus on what the investor says and forget the rest of the world. Not receptive to taking feedback or working on product iterations Founders have this 'I know it all ' attitude. Confidence is good but you cannot afford to carry your attitude along with confidence. And this 'I know it all ' attitude can be detrimental to your business firm as well. You have to listen or be receptive to taking feedback from your fellow co-workers or from investors. Customer-centric feedback can help your business attain great heights. You must take feedback from customers and work on your product iterations. Remember, the Apple 7 you have in hand is not the first product. It has gone through thousands of product iterations before it was finally launched in the market. You will surely experience a decline in start-up funding if you do not supply the right kind of product. Failure to deal with people You might be the CEO of the start-up company but that doesn 't mean you are capable of handling situations all by yourself. You need people to handle vendor 's pressure. You also need genuine employees ' feedback to help you get on track with the business. As a founder, if you feel you can handle everything in one go, then you are fairly mistaken. When an employee genuinely walks up to your table and says there is a better way for figuring it out, kindly have the patience to listen to him or her. That particular idea can actually elevate the business to Himalayan heights. You never know! Hence failure to handle people effectively can be another main reason for decline in start-up funding projects. Never giving ample time to employees to finish their product assignments These non-tech founders want everything done in a jiffy. They want the app built, logo design created, fully up to date algorithm and a completely functioning product released, over-night. You cannot expect everything to happen overnight. There are several components that are involved in a product cycle. And the product getting launched is the hard-work of thousands of employees who have had sleepless nights, working for your company. Give ample time and free space for the employees to complete the designated task in favor of your company. Series of failed Indian start-up funding units include firms like Ask-me-bazaar, Hiree, etc. And now you know the reason as to why? As founders, keep your feet grounded and work with dedication, determination and perseverance needed to help your business grow. You will definitely attain success one fine day. Super-successful entrepreneurs have always had humble beginnings and have failed multiple times before they rose all the way to the top!

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