I know, if you're an entrepreneur, the last thing you need is another doomsayer. So I'll be brief. After the last month of talking with angel, strategic and venture investors, and dealing with more than a dozen start-ups, it's clear to me that the IDEA behind a new company has moved to fifth place in the list of what it takes to raise money and at least hang on to the cliff of survivability by your fingernails.
My list of the critical factors, both for fund-seekers and companies trying to survive:
1. The Team
If you, a teammate, or very active board member (not an advisory board member), have never raised start-up capital and launched a company with it, forget-about-it. And secondly, there has to be real seed money in the game from the same folks or friends and family.
2. Luck & Speed
How is your deal moving at lightspeed to be the lucky winner in the niche you're targeting? And don't tell me it's because you have a better idea than the others.
3. Money
(See No. 1). Unless you already have enough money to actually launch your business and let the marketplace validate or tweak it, you are up against too many other deals that have launched, have money, and are pitching their path to scaling their businesses.
4. Launched
(See No. 3). When you are launched, are you executing with precision and innovation? Can you demonstrate to potential investors and business partners that you have discovered and optimized ways to make money and acquire members like none other?
5. The Idea
Oh yes, your Big Idea. If you are going to say your idea is "like x, y, and z companies but better", then you'd better have 1 thru 4 above nailed first. And, if you want to challenge me on this point, give me a ring and I'll go thru a list of 20 companies with brilliant ideas that have either gone poof in the last few months, or will just around the corner.
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