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Johnny Helmberger

79% of Startup Deaths Occur Here

December 3, 2020

79% of Startups Die in a specific growth stage and we want to change this. Before addressing the best approach to live through to exit, or whatever the intended future would be, let’s get right to it: this “death stage” happens between seed and series A funding rounds. It can also be viewed as early growth stage, through accelerated growth and steady growth. How can we change this?

The approach to breaking through to steady growth:

  • Eliminate blind spots, surface hidden issues and maintain awareness
    • scalabilty issues, friction throughout business, ability to respond to evolving markets, notice emerging opportunities
  • Plan and execute the appropriate strategy with mindset alignment
  • Recognize wide range of resources – funding resources are key

It’s becoming widely recognized that strategies usually aren’t executed well, let alone at all; and this is because group mindset isn’t cohesive nor aligned. But let’s assume a business has a holistic sales growth strategy and mindset already and is about as ready to jump on emerging opportunities as Pfizer on a pandemic vaccine: considering we want to see founders live life expanding their impact, not knocking years or decades off their life for the sacrifices they made to reach an exit, it’s important to consider what resources already surround us which we haven’t noticed yet, take an inventory and put out there what may be missing that could still lift the business further. If a business is at the early growth stage, or in adolescents, we can presume this may be where capital needs fit right in – right in the middle of the “capital gap.”

…this “death stage” happens between seed and series A funding rounds. It can also be viewed as early growth stage, through accelerated growth and steady growth.

This so-called “capital gap,’ as referred to by Shane Erickson, founder of Traction Capital, a venture capital and private equity firm, is precisely why he launched Focus Fund I – dedicated to making investments in, or acquisitions of, early stage and lower middle market companies that are stuck in the “capital gap.” – with a focus on Minnesota-based businesses.

“Minnesota has no shortage of great ideas and capable entrepreneurs, but funding availability for these ventures at the early stages lags badly…” said Traction Capital investor and Minnesota Cup Founder Scott Litman. “Traction Capital will be a great complement for Minnesota Cup and other organizations and initiatives that are dedicated to promote and enable the success of entrepreneurism in Minnesota.” (BusinessWire).

We advocate reinvigorating strategy and mindset alignment as the key approach to breaking through challenging circumstances, and given the challenge many of these early stage growth companies face, we’ve teamed up with Traction Capital to make sure everyone we’re working with is playing their best hand and maximizing their impact.

If any of this rings true and you would like to learn more about strategy + mindset, please reach out, or schedule a free consultation.