Photo courtesy of Wikimedia Commons, Author, Hagainativ
Entrepreneurs are fairly straightforward individuals. Most startup founders that I interact with (and I do my best to speak with as many as possible in my own time) are very clear about their challenges and needs in creating a business completely from scratch. These needs, while varying, almost always come down to two main elements: mentors and funding.
Startup founders, for the most part, work alone or with just a few peers. What they normally lack is continuous helpful advice from at least one mentor (usually an already-successful entrepreneur) to push them in the right direction or to answer tough questions about building a business.
According to an analysis by the research arm of Endeavor, a nonprofit that supports entrepreneurs globally, startups with good mentors (i.e. previous founders of companies) tend to be much more successful and much more likely to be a top performer than those without.
This shows the necessity of good mentors and the potential stagnating effect of a lack of good mentors in an entrepreneurial community.
Funding of startups is a massive issue and I plan to write more on this particular subject in a later blog. The main methods of funding that focus specifically on startups are venture capital and angel investing.
In less-developed markets these options are scarce, and finding funding as a young entrepreneur can be both incredibly difficult and extremely discouraging. Often, the only funding options available to entrepreneurs in these markets are:
- Personal capital (impractical unless the founder is already fairly wealthy)
- Government grants (a good source but difficult to do in heavily indebted countries)
- Multilateral organizations (a great source but rarely focuses on small startups)
Lack of funding is a key issue, as it is usually the sole factor that can stop an entrepreneur dead in her tracks.
Lesser startup challenges include undeveloped public markets where only the few largest enterprises go to an IPO (initial public offering), leaving smaller businesses disconnected to most investors and a lack of scientific research from universities and think-tanks that can drive technological innovation.
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