A startup company is basically a small enterprise newly established or still in the planning phase, whose goal is to develop innovative activities, with very low maintenance costs and the ability to generate profit quickly. It must have the economic capacity to keep active and grow, but not enough to change the way it earn money and still need to be able to deliver the product or service in a scalable way, so that it reaches a large number of people, without losing quality. Because the internet business require investments much smaller, this term applies very well to online businesses, but can also be apllied to traditional companies. Due the fact that it costs less to start a business on the Internet, it has become easier for many who dream of making a living from their own ideas. In the year of 2012, Mountain do Brazil, startup incubator, did an analysis of 305 startups that were looking for investments. During this time, it was detected 4 major factors that were stoping them from geting an investment.
Of the projects submitted, 172 were rejected immediately, 91 were asked to remake some strategies to present a more complete project and 42 were called for a meeting presentation. Even with so many ideas, only three companies received investments of R$ 500 thousand to 1.5 million. Nicolas Gautier said;
We have determinate a careful process to determinate which companies have more potential.
Gautier then shows the four most common problems that prevent Brazilian startups from geting their desired financial support.
1) Unprepared and inexperienced team.
2) Market competition.
3) Potention to expand.
4) Return on Investment.
Read more about the 4 factors here.