The cold hard truth is that 60% of start-ups fail within 3 years.
That means only 4 in 10 make it through year 3.
All those dreams unrealised, all the hard work and planning wasted, sleepless nights endured and within 36 months 6 out of 10 will have closed their doors. Heart-breaking.
Research shows that the majority of the time it isn’t even the business idea that is the problem. Let me say that again…it is not necessarily that the business idea is bad.
It’s the money side; the business structure; the people hired; the founder’s focus; the approach; a lack of experience; lack of network - I could go on.
Why are high numbers of good business ideas stalling?
As a natural entrepreneur myself I have spent the last 17 years working within the investment and private equity world with founders and VCs alike. I have watched incredible founders with exciting ideas slug it out in the marketplace or the investment funding ring. Trust their gut and get it wrong. Hire the wrong people, at the wrong time; put the right people into the wrong structure; be too controlling, not controlling enough; walk away from an amazing investor for fear of losing equity; or give equity away to an investor who hasn’t got the capacity to really help.
One thing which I can say for sure is that the probability of success increases dramatically with experience.
Often the 2nd or 3rd business idea is the one which flies.
I know that experience counts.
Supporting start-ups, fostering innovation, sharing experience… isn’t that what Venture Capitalists (VCs) do?
That is certainly the aim. But in reality, I don’t believe the system in the UK is working for founders, or for innovation. If it was then 75% of VC backed businesses wouldn’t be stalling between seed to series A rounds.
Recent research by Beauhurst and SFC Capital shows that year-on-year seed funding has dropped by 17% per year between 2018 – 2020 and that the number of VCs equipped to support seed stage businesses is completely outstripped by those at other stages.
I don’t actually believe that VCs are set up to foster very young start-ups. Start-ups are notoriously risky. Yet VCs have to do what they can to protect themselves from high levels of risk. This is, I believe, part of the reason why many of those working for Venture Capitalists are primarily from a finance and banking background.
The facts are that in the UK only 9% of VCs have commercial experience, whereas in the US it is around 82%.
This cannot be positive for UK start-ups, which are the very lifeblood of innovation.
I see a different way.
The idea of VÖR has percolated in my mind for a long time.
In 2020 Covid ripped through the world, shaking up economies, resulting up to 255 million jobs being lost (at time of writing). As a direct result we have seen a wave of entrepreneurship and an increase of 30% new business registrations year on year November and December 2020 ONS, 2021.
The climate felt right to begin sharing the concept with both sides of the market. I got an incredible response.
Both founders and interestingly investors and funding houses too are crying out for start-ups to get real world support – so they are able to progress more easily through the growth stages and to be in optimum investable form during funding rounds.
This is why I founded VÖR.
To power businesses to deliver high-growth; faster, more easily with less risk. And ensure the best ideas rise to the top.
I have hand-picked the highest calibre, most experienced team of specialists to support founders both strategically and operationally. The growing VÖR team is filled with people who have been there and done it themselves; grown businesses, founded businesses, invested and successfully exited businesses.
VÖR can be your growth partner and help you benefit from the experience of others. We can guide you strategically with our arm around you or simply to take the operational, expensive or time-consuming jobs off your hands. Whether you need to raise, to expand, to scale, to go it alone or to exit.
Our team and our network know what they are doing. We can help you with:
- when to gain investment, when to spend;
- who to hire, and when;
- how to structure, how to govern;
- how to develop;
- how to build a brand and position a business;
- when to outsource and when to bring in-house.
We realise this support won’t be for everyone. Founders are clearly single-minded and independent by nature. Many choose to go it alone.
60% of start-ups fail within 3 years
75% of start-ups fail to progress seed to series A
VÖR can help. Let's talk today.