Does raising outside capital work?
The stats are troubling:
- ~95% of cleantech projects never get funded (Bloomberg New Energy Finance and others)
- 55% of startups die raising $1M or less and 70% of startups die raising $5M or less (CB Insights). This is why traditional VCs don’t fund cleantech startups much at all these days.
- Of all companies, about 60% of start-ups survive to age three and roughly 35% survive to age 10, according to separate studies by the U.S. Bureau of Labor Statistics
- The National Venture Capital Association estimates that 25% to 30% of venture-backed businesses fail.
So what? Give up? Please don’t. Just don’t fall into any of the notorious traps. Make better mistakes than that. Make some new, non-fatal ones and learn … learn all you can to become better prepared to beat these odds. Oh, and be sure to use an effective strategy, and be prepared to accept feedback and adjust or pivot as necessary. How?
Start by picking the right partners, the right opportunity (timing as well as the one that’s best suited to your team’s capabilities/competencies), and the right affiliations to get it done. Also, follow the money already invested to model that success.
But mostly, since we have been at this for awhile, hire advisors that already made the mistakes you are about to.
Questions? Contact us
Daniel Robin
REIF Managing Director
Comments are currently closed.