Why Your Startup Is Going To Fail

Posted: Dec 30 2013, 7:11am CST | by , in News


Dear Entrepreneur,

Thanks for being in touch with our venture capital firm. We’ve thoroughly read your business plan, fully examined your forecasts and prognostications, and done full due diligence on you and the rest of your team.

Unfortunately, after reviewing your 47 page powerpoint, we’ve decided to pass on this investment.

But, before we do, we’d like to leave you with some words of encouragement: basically, your startup is going to fail.

And it’s not just because 75% of venture backed business don’t return capital. It’s actually because you’re not being honest with yourself.

(cue speech where I judge you mercilessly)

Here are 16 reasons why your company will fail:

  1. You don’t really know who your market is (I mean, do you really know their pain points and how much they’re willing to spend to alleviate them?)
  2. You’re not familiar with how to sell to this market.
  3. Nor, do you know how much they’re willing to pay for your (theoretical) product. You need to get the gospel.
  4. Who cares that your best friend loves your idea — does anyone else?
  5. I’ve already mentally moved on to my next meeting by the time you reached slide 36 in the powerpoint you’ve spent 3 months creating. #YOLO, right?!
  6. With so many competitors in your space, it isn’t about whether you can build a better moustrap — how are you planning on getting in front of your customers?
  7. If your target market is the mass affluent over the age of 62 1/2, how come you designed a product that appeals to Redditors?
  8. Technology roadmaps are great, but where’s your go-to-market roadmap? How are you going to make you (and your investors) money?
  9. I don’t want your learning about the market and how to sell into it happening on our investors’ dimes.
  10. TAM (total addressable market) doesn’t stand for “Wham-bam-thank-you-man”
  11. While we’re on the subject of total addressable market, do you really believe your top-down assessment that you’ll get “just” 5% of this $100B industry?
  12. I know you’ve left your Team slide until the end of your presentation. But investing is a team sport — who’s going to get you to the finish line? That’s what I want to invest in.
  13. Dude, where’s your excitement? I’m falling asleep during your presentation (and I always get at least 8 hours of beauty rest every night). Without a higher energy level, you’ll run out of gas getting users excited about your technology.
  14. Failure may be a badge of honor, but so is success. You need to convince me that you’re going to make this happen — whatever it takes.
  15. Continuing down this line of reasoning, I’m not sure you (or your team, for that matter) have the requisite flexibility to shift gears if things warrant it. I kn0w, I know…life’s a bitch sometimes.
  16. Oh, and one other thing, if you think that I (or my fellow VCs) can repeatedly pick winners by sorting good ideas from bad, I’m not sure you deserve our investment. When push comes to shove, our industry rewards risk managers, not visionaries.

That said, we’d like to stay in touch. Please keep us posted as to your progress. We’d be happy to give your investment more consideration when we’re absolutely sure you’re headed in the right direction (when you’ve proven you have a market and customers).

Your startup brother,

Mr. Venture Capital, MBA

Disclaimers: This article is (primarily) satirical. No startups were harmed in its writing.

P.S. Seriously — have you had any memorable encounters with an investor? C’mon, we all have. Drop a comment with your best. Or, check out our recommendations for how to pitch an investor.

Source: Forbes

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