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Of all the challenges faced by startups and small businesses, finding investors willing to commit funds is among the most widespread. Already facing significant challenges with technology and supply chains, maintaining a positive cash flow in the early days is exceedingly rare in the startup world. Even after receiving startup funding, businesses often take years to break even, and report profits.
Shows like Shark Tank, while oversimplifying the struggle founders face when trying to find backers, do have some valid points. Being an investor in a small business is more than just providing money, but having an experienced set of advisors on board can help a small business emerge into markets that are often competitive. In this article we will highlight the stage of the startup process where small businesses would require funding, and how investors can alleviate these issues. While it does not buy happiness, money can certainly pave the way for the startup’s success.
Proof of Concept Stage
In recent days, founders with high-level IT educational backgrounds prefer to invest in high tech fields. Innovation is expensive, and implementing these ideas into a minimum viable product, or MVP, has significant challenges. Even creating something to show investors and potential customers has proven to be a step too far for many companies. With barriers ranging from regulation hurdles to simply being thwarted by the laws of physics, changing the world is an expensive affair.
This expense, often without any timeline on investment returns, can happen over several years, or even decades. Even if an early-stage product is ready, the technology needs to be peer-reviewed and tested in real world market conditions. Having a board of advisors who understand the industry and have supply chain connections is a bare minimum that startup founders should be looking for. Sometimes ideas take time to develop, so patience is probably the most valuable investment of them all, especially when one can deploy technology to change the world.
Having an ambitious vision is the first step in attracting talented individuals who are capable of taking a startup to the next level. Most of the large corporations, in recent years, allocate a significant amount of their annual budget in developing their own workforce. This dedication to building a dynamic team from within has proven successful in competitive markets.
With talent often having sunk thousands of dollars into an education, and built up a reputation over years of experience, compensation will be a factor in their decision-making.
Marketing - Differentiating A Startup From Competitors
All viable businesses will have competition, since a lack of competitors in the startup world is often a sign of an offering simply not solving a problem that the market values. This coin of competition has two sides. Firstly, the risk for both investors and founders in funding a small business startup reduces if a market need is apparent. However, the flip-side means a more crowded messaging landscape, especially for a limited number of potential customers.
In order to reduce the threat of entry into a market characterized with high market volatility and severe competition, companies have to set aside significant marketing budgets and draw a clear strategy to win the battle at the startup stage.
WAHED to Connect Investors with Startups and Small Businesses
WAHED investment is building an ecosystem to simplify the investment process, and to streamline how money goes from investors to the startups who need it. Powered by WAHED Coin, WAHED will work closely with small businesses to ensure they have all the tools and expertise to compete in the competitive market landscape.
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