Why Start Ups Have To Become Proven Companies To Survive

As venture capitalist investors already know from bankrupt start ups and hundred million dollar companies, the survival rate of a start up is extremely low. As you might guess, there are several reasons for companies to go bankrupt. Commonly, they cannot secure the funding they need to go on either from internal sales, loan financing or outside investment. Even more so, failed start ups are unable to reach another level: becoming a proven company.

Perhaps, one of the most common problems for start ups is becoming a proven company. Concept of becoming well known, tried and trusted by customers is a long process that leads to a proven track record. Quite simply, if the start up cannot prove it’s worth in sales, service or both, it is destined to fail.

However, proving the company’s value and worth can be a difficult task. To become well-known, the company must outperform the competition in price, quality or some other measure. Customers or clients need a reason to buy once you have got their attention. Depending on the company, a few good customer experiences could create all the marketing you need for the foreseeable future.

To become a proven company, you have got to work for it. If you have done your homework, there should be a nice pot of gold at the end of the tunnel. And if you ask our venture capitalist friends, they would agree. That must be why VC’s have actually slowed down on investing with younger start ups and backing more established companies that have proof in the pudding. Which, in case you are wondering, is true.

So if you’re looking to succeed in funding or sales, your start up has to take the next step towards becoming a proven company. It should not take too long to show that your stuff works! With a little creativity, you can create prototypes, offer free trials or record video demonstrations for people to check out. Despite what most entrepreneurs believe, you don’t need a full assembly line or warehouse distribution facility to show that you have value to offer customers or other businesses.

If this was a perfect world, everything would be equal and prices would be exact. There would not be much room for profits. Luckily for entrepreneurs, this planet is far from perfect. Many companies make a handsome profit from specialty products, repairs or services. In niche markets, there is plenty of room for competition, growth, innovation and of course, success. So, get out there and become a proven company!