i3 - January/February 2019 - 95

By Steve Koenig

Business

M A R K E T B E AT

Risky Business: The Best
Practices for Entrepreneurs

ntrepreneurship: It's usually high risk with the hope of
even higher rewards. Sacrifices are made, unexpected
challenges encountered, and victories, both large and
small, will be celebrated along the way. Entrepreneurs often say,
"If only I had known." From the initial business vision to the
realization of desired success, no two paths are the same.
This is why CTA recently published Startup
Best Practices - forged from new research
conducted with emerging small businesses
- as part of its ongoing mission to champion
and support technology startups. Despite
different backgrounds, experiences and
entrepreneurial paths, the study shows that
startup founders share several commonalities: a need for funding, guidance, growth
and resources to help achieve their goals.
When it comes to brainstorming, partners, colleagues and a new business model
top the list of most trusted resources. Nearly
three-fourths (73 percent) of entrepreneurs
indicate they relied on the advice of partners or colleagues to help them develop the
idea or business model surrounding their
most recent startup. In addition, half (48
percent) turned to friends and family, while
legal counsel (33 percent) and mentors (33
percent) were commonly utilized among
one-third of entrepreneurs.
Entrepreneurs may bootstrap the emerging business initially, but often more capital
is required to really get things going and
finding investors can be a challenge. While a
variety of resources are available to entrepreneurs, it can still be a long, arduous process.
The best way to find investors for the business? Leveraging one's own personal network. To find investors, startup founders
most often rely on those who they are closest
to, including friends and family (63 percent)
and partners or colleagues (60 percent).
To mitigate risk and exposure, savvy investors consider a range of factors before investing in a startup. Most commonly, they assess
the ability to grow and scale (78 percent), followed by product viability (68 percent) and
C TA . t e c h / i 3

5 Factors
Investors Consider

78%

The ability to grow
and scale

68%

Product viability

63%

Market validation

53%

Team composition

50%

Business plan

market validation (63 percent). Their team
composition (53 percent) and business
plan (50 percent) round out the top five.

Business Concerns

As a startup grows and evolves through
various funding stages, so do business
priorities. Companies in early-stage
funding are generally in primary development stages, which leads to product
development becoming a high area of
focus. Among entrepreneurs surveyed,
roughly eight in 10 indicate product/
technology development was a top priority during the early stages of funding,
with an additional 48 percent focusing
on financing the business.
Hindsight is always 20/20, providing
opportunities for entrepreneurs to learn
and grow. When asked what they would
have done differently during the early stages
of funding, about three in 10 entrepreneurs
say they would have approached fundraising in a different way. Twenty-two percent
believed they could have done better
regarding hiring and culture management.
Once past the initial stages of funding,
priorities tend to shift from product development to growth and sales. Regardless of
their specific stage of funding, 62 percent
of entrepreneurs indicate they will prioritize scalability as they receive their next
round of funding, with roughly half who
plan to focus on growth (54 percent),
product launch (51 percent), and expansion of the customer base (49 percent).
Need more help with your startup?
CTA's Startup Member Working Group
offers a wealth of startup-focused
resources designed to help entrepreneurs grow their business, including
mentoring, advocacy, market research,
education and networking programs.

2019

CES 2019 Visit Eureka Park, the
premiere location for startups at CES.

JANUARY/FEBRUARY 2019

http://www.CES.tech https://www.cta.tech/

i3 - January/February 2019

Table of Contents for the Digital Edition of i3 - January/February 2019