Thoughts on startups by investors that
fund them & entrepreneurs that run them

Category Archives: When Startups Fail

Idea Non-Disclosure Demands Kill Investor Interest

Entrepreneurs often get the advice from their lawyers and friends to always get a Non-Disclosure Agreements (NDA or CDA) signed before disclosing anything about their new venture. Most investors and startup advisors I know hate them, and refuse to sign them. Who is right?

Let me try to put this question in perspective. If you are totally risk-averse, then push

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8 Reality Checks That Every Startup Founder Dreads

Starting a business is a lot like starting a marriage. At first, all parties are in dreamland, with a vision of changing the world, having lots of fun, and raking in the profits. But all too soon, reality sets in. Product development is stuck at that 90% mark, a key person leaves, and customers are talking but not buying.

In

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10 Entrepreneur Comments That Kill Investor Deals

Lack of confidence in your self, your product, and your startup is a surefire recipe for disaster. At the other extreme, too much confidence or arrogance can kill you just as fast. It’s always painful when a startup fails, but as a mentor to founders, I would hope that you can learn from these failings and not stumble on the

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Big Obvious Failure is Better Than Long Slow Lack of Success

Steve Blank has a good post today called Failure and Redemption, which he introduces with this:

We give abundant advice to founders about how to make startups succeed yet we offer few models about dealing with failure. So here’s mine.

Steve’s experience was Rocket Science Games, which raised $35 million and a cover story in Wired Magazine before failing. He writes about

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7 Startup High Risk Factors That Scare Investors

We all know that every startup is risky. No risk means no reward. Yet every investor has his own “rules of thumb” on what makes a specific startup too high a risk for his investment taste. You need to know these guidelines to set your expectations on funding.

Of course, if you intend to fund the business yourself, or have

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Market Opportunity From Customer Hostility, Exhibit 802.11: Airline WiFi

Entrepreneurship is often born of founders’ sheer frustration with the status quo.  One class of clear business opportunity, which wouldn’t exist in an ideal world, is created by the service that seemingly makes it as difficult as possible for potential paying customers to make it take their money.  This sort of chronic customer dissatifaction flies in the face of both

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10 Things That Make a Business Plan NOT Fundable

I really like Martin Zwilling’s post here yesterday, 10 things that make a business plan fundable. That made me think about this list, the opposite, things that make a plan not fundable. Before I start, though, I second Martin’s motion on the use of business plans:

People ask me if they really need ANY business plan, unless they are

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What is it like to lose all of your investors’ money?

I’ve been on both sides of this event, and believe me, it is not fun. But it is, unfortunately, a virtually inextricable part of the entrepreneurial life, and what matters most (at least in the US, where entrepreneurship—and even valiant failure—is celebrated rather than reviled) is how you deal with it.

I am one of the more upbeat, positive-thinking people

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The Road to Crowdfunding Hell

The lack of rational analysis about equity crowdfunding is remarkable to me.  Sure, it sounds like an easy source of startup capital that should lead to happy entrepreneurs, delighted investors and job creation galore.  However, this will likely not be the case. Few pundits seem to have the depth of knowledge and foresight to look far enough down the equity

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Copywrong Again: Founding the Next Pinterest or Napster?

As I wrote in Part I of this post, many of the most creative and disruptive startup businesses in recent years have involved the use of intellectual property in innovative, non-traditional ways that defy easy categorization and stretch the boundaries of concepts such as the fair use doctrine in copyright. When presented with a product or service in development, we often have to admit that there

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