Why You Should Never Found a Startup
When discussing startups, we often envision success stories like Facebook, Airbnb, Uber, and Revolut. But what about the other side of the coin? What about the startups that failed to find their product-market fit, those that never secured funding, the 90% in the shadows?
The romanticized notion of being a startup founder, complete with dreams of absolute freedom, creating the next big thing, and becoming the next (less eccentric) Elon Musk or (living) Steve Jobs, often clashes with the harsh reality.
Many reasons speak against starting your venture:
You Won’t Get Rich
The truth is: You will most likely fail. According to statistics from the National Venture Capital Association, between 30 and 40 percent of VC-backed US startups fail, meaning the investors lose all their money.
Even if your startup becomes successful, you might not get wealthy. Investors usually get preferred shares in venture capital, while the company’s founders and employees get common shares. If the company is sold or has financial trouble, preferred stockholders get some or all the investment money back before regular stockholders. Why should you care? Finding willing buyers is challenging due to lacking a market, even if you’re running a successful startup.
