Why startups fail and why investors invest? (Petri Lehmukoski)

Entrepreneur and angel investor Petri Lehmuskoski shares his experiences on why startups fail, how to validate your business idea, and how to find a right investor.

0:17 85% of startups will fail within first 2 years
0:37 less than 10% are able to raise external finance
1:05 Background of Petri Lehmuskoski & his mission "I am going to help 30 successful companies to be formed every year"
3:08 Five stages of startup development: idea, hallucination, externally shared vision, business validation, innovation.
3:47 Money will distract startup from the path

4:07 Each stage requires loads of learning

6:29 Each stage requires different type of financing
6:55 Too much money will create problems. Companies with limited funding are more successful
7:10 Ideas are just the multiplier of execution (Derek Sivers)
7:44 You have to learn to crawl before you can run. Even if you have past experiences.
8:42 Startups fail because of premature scaling: they stop learning and begin selling (Startup Genome report)
9:13 Early startup mission is generate learning, not revenue!
9:46 Theory and reality of startup growth process: linear process vs continuos learning

11:12 Top 4 competitors of every startup

13:10 Only 8 people out of 1000 startups have asked Petri, why he did not invest

14:13 What investors look at startups?

15:04 PROBLEM

16:38 Difference between big corporations and startups: execution vs learning

17:43 ADDED VALUE

19:45 SOLUTION

21:12 Case of getting 15 deals without a real product

22:36 TEAM

28:54 BUSINESS POTENTIAL

30:51 In B2B customer acquisition cost is usually 1000€. In case of SAAS hundreds of Euros.

31:33 ASKING FOR MONEY

32:47 Preparing for investor meeting

34:32 What kind of investors are there?

36:02 Different investor profiles and strategies

39: 24 Additional important questions from investors:

45:54 On average a VC can spend to a start-up 3 hours per month. Their mission is to help to raise capital for a next round

46:28 Choose the right investor for a right start-up stage. Investor's roles

48:53 FEW TOOLS

54:00 Q & A
- Is it worth to go out and validate the idea with any customer?
- What are your typical exits and ROI on invested capital?
- What is the best ownership splitting principles?
- Have you made your six investments already?
- What are the 3 differences between good and bad teams?
- Why do you cause conflicts in start-ups you invest into?
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Investing in your future! StartSmart! events are a part of FINEST Startups project and the activities can take place thanks to the co-financing by the Central Baltic Interreg IV A 2007-2013 programme.

The material on the website reflects the authors views and the Managing Authority cannot be held liable for the information published by the project partners.

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