Why 99% of Entrepreneurs Fail & How to Get Around It Quickly
Understanding the Difference Between Conventional & Capitalist Entrepreneurs
Understanding the Difference Between Conventional & Capitalist Entrepreneurs
So how did you first start your business?
That’s a question people usually ask as an icebreaker to all startups.
It’s exciting, every startup has its ups-and-down but the end goal is all the same. To see “success”. Every entrepreneur must share a good story about the company's progress despite hardships and difficulties. No one likes a downer right?
A company’s success aligns with one goal in mind: profitability
Whether you are a small company or a non-profit organization, the goal is to increase capital and use it effectively. However, most entrepreneurs aren’t able to do that which is why 99% of them fail.
Since starting my company over 3 years ago, I’ve met many other entrepreneurs who rise and fall. Those failures and successes taught me the fundamental aspects businesses need to understand about how to be a capitalist entrepreneur.
Money Talks
Seriously!
Many people may argue entrepreneurs started rich using names like Bill Gates, Elon Musk, or Mark Zuckerburg as an example. But many fail to realize that these entrepreneurs didn’t get to where they are because they have good skills in the fields of coding or engineering.
Money talks, you need this startup capital to:
Hire good talent
R&D on product or service
Tide through difficult times
Market your business (can be costly)
The reason capital entrepreneurs are able to succeed is the ability to understand their product needs, allocate resources effectively, and raise capital to accelerate their business growth. If you are looking to outcompete your competitors, you need to come up with something innovative that’s disruptive to the market.
Disruptive and Innovation
There’s a reason why investors and VCs are hungry to find potential disruptive businesses such as AI or tech right now they understand these companies are fundamentally less capital-intensive to start and have the highest rewards-to-risk ratio to earn returns from.
Take for example: OpenAI or ChatGPT. Microsoft spent over $13 billion to own 49% of the company which has been one of the best investment moves in 2022. In 2024, OpenAI is on track to earn over $2 billion in revenue and is expected to grow exponentially with its new product launch ChatGPT 4.o.
I’ve shared an article on why I believe AI would be the next wave of IPO resurgence in the article link below.⬇️
Can AI Hype Fuel an IPO Resurgence?
Examining the Potential Impact and What Startup Founders May Want To Look Intoedmundchong.substack.com
Raising Capital
My company is worth $100 million. Are you okay to invest $10 million for 10% of my company?
If you were to go out and ask for money from your friends and family, how much do you think you’ll be able to raise? Truthfully speaking, do you agree it’s easier to raise capital from VCs rather than your own family and friends?
This ability is what differentiates between a conventional and a capital entrepreneur. The ability to convince investors is critical.
If Elon Musk hadn’t convinced investors he would be able to land rockets, SpaceX wouldn’t be worth $180 billion.
If Mark Zuckerburg hadn’t convinced VCs and investors that a 26-year-old at that time would be able to create social media, Meta wouldn’t be in the top 5 biggest company
Before 2020, everyone thought AI was simply a geek’s toy to have a fantasy bot. Now, many businesses are forced to implement AI and understand ChatGPT to be used in their business to keep up with efficiency
Everyone starts from somewhere, and in reality, it’s okay to be a conventional entrepreneur and not raise capital when first starting out your business. I certainly started that way as well!
How to Raise Capital?
If you were to start a business as a conventional entrepreneur, it would be a lot more difficult since you’re required to tap into your own liquidity pool, but all it requires is more of your time to build.
CEOs wearing many Hats
Founders and CEOs have to take on multiple roles if they are looking to succeed. Chances are, if you founded your company, your task is to be the CEO, CMO, CFO, CTO, and COO of the company.😂
While those days may be the most stressful part of the business, it’s the best learning process that all entrepreneurs have to go through. I certainly enjoyed those tough times.
Be good at all these, you’ll never know when they will be your swords in the future. I certainly didn’t expect to help market for other companies because I was very effective in my own business marketing.
Use Current Profit to Illustrate Future Profits
Why do you want to raise money? To make more money right?
As entrepreneurs, we need to make sure our company is running in the green, or at least trying to make a massive breakthrough. As investors, they are likely more convinced when your business has profit to lend on.
To convince investors, you’re depending on future profits. It takes more of the risk off them since your job is to outline the path toward those profitability goals. Which is a lot easier than investing in a company without any revenue.
Understand Business On A Networking Level
Entrepreneurs are likely to start up a business alone. There is a need to network with other businesses to bring ideas to your business.
Take for example HustleVenture; the business that I’ve been running. It’s a finance newsletter business that is now producing content through media as well. And it’s more profitable.
You see, networking isn’t just a place for you to find services or businesses to sell, you’re goal is actually to find ways to help everyone. As an entrepreneur, the goal is to make everyone’s life a little bit better and meeting other entrepreneur is a good chance for that.
Running a Company Is A Team Effort
Ultimately, running a company is somewhat a team sport and your goal is assembling your Avengers. Everyone has its own specialty and you need to make everyone work together.
If you think you have what it takes, congrats you might actually be the top 1%!
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