Top 10 Reasons Start-ups Don’t Get Funding

From proving market viability and articulating the business plan to meeting with the decision makers, start-up companies and entrepreneurs can see a variety of challenges throughout the funding process.  However, to get funded, it’s important to also understand why start-ups don’t get funded.

This summer I was a panelist in the vcfo webinar  “Pitch to Win: Get the Edge in Capital Raising.” Among the information presented was the top 10 reasons that start-up companies don’t receive funding.

  1. The market size is too small to support a need for the product or service.
  2. The timing for the introduction to market is too late or too early, resulting in a lack of a need.
  3. The product or service doesn’t match investors’ focus.
  4. The entrepreneur fails to relate to true pain in the market.
  5. Valuation expectations by the start-up company are too high.
  6. A go-to-market strategy is not provided, and investors are unsure how the product or service will be marketed.
  7. The pitch materials are weak in both content and design.
  8. Risks and competitors are not clearly defined, which can lead investors to wonder if there is even a need for the product or service.
  9. Mistakes are made within the financial modeling and project data.
  10. The entrepreneur and start-up company make fundamental execution mistakes, such as waiting until too late to ask for funding.

For more information on start-up funding, including the key elements of a successful pitch deck and what investors look for in a pitch, the webinar “Pitch to Win: Get the Edge in Capital Raising” can be found here.