Small Business

Great Ideas: Three reasons why your startup can’t find cash

Written by ProfitGuide Staff

1. You have a one-product company. No matter how breakthrough the technology or invention, many lenders and investors will not fund a business with a single revenue stream. Why? A larger competitor can easily trample your enterprise and the product might become obsolete.

2. You have no track record of sales. At this point, you have a spectacular idea. However, it has not withstood the test of the marketplace. Conducting at least some informal market research might at least validate interest and demand.

3. Your management team is inadequate. You may be an outstanding product developer or inventor, but running a business demands many other skills you might not have. If your potential investors are venture capitalists, you run the risk of them gaining excessive control of your enterprise under the guise of putting a proper team in place. Protect yourself by lining up a highly experienced team in the critical areas of finance, human resources, sales and marketing. Indicate your intention to hire the team when the funding is in place.

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