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A wrong turn or two and you're underwater. We've got the map. The pitfalls that destroy early stage ventures are numerous. StarAnchor has evaluated these in great detail, and we find that the most threatening of them can be relegated into two categories. |
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Delay. This pitfall is the opposite side of our principle of speed to market. Delay in getting to market kills early stage ventures in three ways. First, it erodes momentum, without which attention wanders and distractions drain away resources and initiative, leaving the venture without the will - and possibly the means - to continue to progress. Second, delay causes inefficiency and wastes resources as expenses continue while progress is stalled, be it raising the next round of capital, waiting on patent actions, back order for parts, recruiting for human capital, or whatever. Third, and most important, delay increases the risk that the venture will be overtaken by the highly likely, but unpredictable, next innovation that will make the present initiative obsolete. Trying to Control Everything. This pitfall predominantly afflicts the innovator/entrepreneur. Having "given birth" to the innovation, there is a prevalent tendency to want to manage every aspect of anything to do with it, including all the component functions of commercialization. Another motive we often encounter is the desire to maximize total earnings, rather than Return on Capital as discussed on the Maximum Earnings page. This pitfall results in dramatically increased capital requirements, involving major increases in equity dilution, and corresponding delay - already addressed. |
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© 2006-2008 StarAnchor |
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