Together Is Better

If start-ups need to survive, they should look for a strategic partner, not an investor.

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By Ritu Marya

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"Working hard for something we don't care about is called stress. working hard for something we love is called passion."

Starting a business is hard in the first place. It takes a lot of mental preparation before even a young collegiate decides to take the leap. But the saddest part is most start-ups fail. Infact a recent funding group mentioned that success rate for start-ups is around 2/10. I recently met a founder of one such start-up, who has closed his business. He honestly told me, "It is really heartbreaking and I am ashamed of myself. It has been six months and I still don't want to be around people, asking me what happened." The start-up was rightly incubated and mentored, well funded with over two rounds, and yet it could not make it.

This tells me, that if start-ups need to survive, they should look for a strategic partner, not an investor. They should ensure that the marriage is a real alliance and not a commercial
arrangement.

Start-ups need people who truly align with their personal values, understand their business and game changing idea. This will ensure success in the long run. If either side fails to do their due diligently, then money can be lost, feelings can be hurt, relationships can be damaged and most importantly businesses can fail. In this issue, we have looked into new league of investors, who come with a different science of investment. Their need to invest and partner with startups is to leverage their professional equity, seek diversification of their current businesses by mentoring a newventure in the right direction, or help them find an area, where they have the ability to add some real value. The Kauffman Foundation's research on angel investing shows that investor expertise has a material impact on earned returns. In fact, returns were sometime twice as high, when an investor invests on ventures, where his expertise lies.

The issue also looks into the disruption by the fintech start-ups, there are five key areas that have seen the biggest growth and the most of them in the fintech space.

(This article first appeared in the Indian edition of Entrepreneur magazine October 2016 Issue)

Ritu Marya

Editor-in-Chief, Entrepreneur Media (APAC & India)

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