Major Obstacles for Startups During a Financing Round
Christian Saxenhammer emphasizes in a guest article for t3n.de, the most important reasons why a startup financing round can fail.
t3n / 2020.02.13
The general orientation of the company, its products and services, rarely lead to the failure of negotiations in the middle of a financing round. These aspects have been checked long before VC and business angels get involved with the respective young company. More importantly, they will look behind the scenes, check the financial figures, but also the mood within the founding team. It is, therefore, also important that the founders share the basic values and goals, and that their story is the same. Several founders are beneficial; different backgrounds and strengths promote the project, but there should also not be too many founders. Moreover, it is rather important to gather experience and show presence in the market in the early phases rather than to try to optimize every step of the venture at a great expense. Another decision criterion is the economic sustainability of a company, whereby a solid, long-term profitability should be demonstrated. Problems can arise where one would not expect them to arise. Investors tend to be sceptical if a company grows too fast or expands into foreign markets at an early stage.