Re: Off-topic. Very Interesting Day
Your information is 100% correct but those statistics are general in nature and apply totally to all start up companies.
In this case, the changes made by this company increase the odds of success
There are many problems that start up companies face with lack of capital being the #1 reason.
Up until recently and starting with Shark Tank, that problem was being addressed. That is what most companies in the incubating industry offer. Nonetheless, the lack of money is only one of the problems.
here is a list of additional problems that start-up companies face
1) lack of experience
2) lack of manufacturing knowledge
3) lack of a sales force
4) lack of management experience
5) lack of legal representation
In recent years some of those problems have been addressed by some companies but none (except two other but recent companies) have attempted to address ALL of the problems.
This is what this company is doing. The principals of the company have experience in each and every one of these phases, anywhere from 20 to as much as 30 years.
The money that is being raised for each 10 start-up company group is a total of $10 million in which 70% of that money goes directly to the start up companies. In addition, they get everything else that is required for them to succeed (list mentioned above). This company literally integrates themselves with the start up companies to cover legal, sales, manufacturing, and management help.
Up until very recently, no other company was doing all of that. Now, this company is only the 3rd in the world that is instituting this idea.
It greatly increases the chances of success.
To all of the above, this company does a complete study of the start-up companies to begin with. The study takes months to do. One of the requirements the start up companies need to show is that they have something unique and that there is a market for that kind of a product. This further increases the chance of success given that these companies have something unique to offer. It isn't as if they are accepting, for example, restaurants or something that there is already a lot of competitors.
Does this guarantee success for the company or the investors? absolutely not but it does increase the odds of success. The numbers you supplied as to what happens overall to start up companies is taking into effect ALL start-up companies. By being picky and choosing the ones that offer the greatest chance of success, as well as giving those companies all the help they require for success, the number of failures is likely to be reduced, meaning that investors that get involved have a better chance of hitting a big winner than a company that simply offers funds and does not offer anything else.
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