How can a startup manage to reach that 5-year milestone?

It’s a well-known fact that startups who survive the fifth year are few and far in between. In fact, only 50% of businesses with employees survive past the first five years.

Angel investors (including friends and family members) help about 50,000 startups in the US with their initial development. However, only less than 4,000 are able to convince investors and raise their first round from venture capital or private equity firms.

“So why is that happening? Why do over 90% of all startups fail? And even more importantly why does one startup get picked over another for funding?”

Statistics like these prove that making smart, fast decisions and developing effective business strategies are key to going through that initial uncertain period.

The best startups are the ones that learn how to create hype for their innovative solutions but at the same time understand that it is vital to manage that hype. This is because a time will come where their solution will inevitably experience lack of traction.

The goal therefore is not to rush into expansion plans. Growth will come at a later stage. When your startup does not have a viable business model, it is critical to concentrate efforts on building a sales engine for your business rather than to make plans to just reach the next milestone.

Founders that focus on improving execution early in the process, enhancing team skills and growing their network, can manage to navigate the hurdles by building “a safety net” around them which will help their business mature and scale up.

… so doing the groundwork and working collaboratively can get your startup funded and help break that 5th year hoodoo!

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