By Dan Brian 
dan@prlink.com.au 

Why do some great ideas and startups seem to succeed so well and others fail? 

Will your office be like Google's or is your great idea sending you 

Coming up with a great idea is a good start. Step 2 most people get is you need to prove that idea has an audience or market either through clients or subscribers who will buy or sign-up for your product or information that will lead them to your product in future. The next part is where most come unstuck. 

Entrepreneurs think that Venture Capital firms or Angels will no doubt think the way they do and although they concede it may take a meeting or two to get the idea across they live in deluded hope that the outcome will be the same. That is, them getting a great big cheque. 

Capital Raising on Great Ideas like Fire on Ice? 

Most VC's and Angels were entrepreneurs, owners, or managers at some point in their career. However, in their new role their survival depends on applying the harshest of scrutiny to your business and ultimately convincing you, should they like it, that it is worth as little as they want to pay in exchange for as much ownership as you're willing to give. Yes, it's really that simple.  

You should think about preparing your pitch and/or approach with this frame in mind. Try to target a win win for both of you. Here's a pitch formatted in Powerpoint used by a successfully funded startup called http://wufoo.com. If you'd like to explore the above perception differences in more detail read this blog from one of the founders on how not to pitch a startup. 

Once you've overcome these audience and perception demands you need to consider the most common reasons we've found for why companies fail to raise funds:

1.  Believing they have capital secured, when the money is not in the bank

 2. Relying on one large investor or founder without seeking backup sources 

3.  No budget allocated to the promotion of their Capital Raising and/or starting the Capital Raising process too late

4.  Trying to raise capital at ridiculous valuations

5.  Poor presentation of their offer to potential investors

6.  Not having the right Board in place

7.  Poor company structure

8.  Not seeking new potential investors, after the initial or seed capital is raised

9.  Falling prey to rip off merchants who promise access to a "ready" source of funding bank, investor, or otherwise based on large upfront fee for service arrangements or conversely paying similar advisors too high a percentage of the capital sort can be an immediate red flag for investors

The common misconception is because you have a good business/idea/opportunities it should be relatively easy to convince others and therefore easy to raise capital. Just in case you were unsure if this is true or not please visit idea-a-day.com to see how much ideas are worth. 

Investors or large companies looking to acquire smaller competitors never look out for great ideas - they look for great ideas with proven audience and market and often must also be showing a strong trajectory towards rapid growth. 

Each time we raise funds for a client or advise on a project we briefly celebrate the achievement and then get straight back to work putting the framework of collateral and company messaging in place for the next round of funding - even if we're not sure they'll need it. 

 Keen to hear some of your opinions or stories on why some are getting ahead while others languish?