Building a Sustainable Startup: A Foolproof Strategy

Do you know that 95% of startups around the globe are failing? The first year of building a startup is the hardest. This is also known as the valley of death. However, this is also a crucial moment where you can ensure the sustainability of your startup.

On Friday (12/6), BINUS BUSINESS SCHOOL invited Eddi Danusaputro, the CEO of Mandiri Capital Indonesia, as a speaker for the CEO Speaks on Leadership with the theme “What Do Venture Capitals Seek in Startups in the Post-Pandemic World?” via Zoom. From the perspective of venture capital, here are the pro strategies for building a sustainable startup.

Steps to Start a Startup

Just like constructing a skyscraper, you need a good and solid foundation. In this case, start by assembling the right founders. Learn each of their capabilities and skills. Chemistry is also important, but this does not necessarily mean that all founders must be the best of friends. Simply, join forces with founders who share the same goals and ideas of what the startup will become in the future.

One is not enough. A sustainable startup needs more than one founder to eliminate potential risks. What will the startup become if the sole founder loses one’s focus? However, it is important to remember that it is not about the quantity of the founders, rather the quality. The ideal is four founders, each with their own specifications.

Generally, building a sustainable startup requires a hacker, a hipster, and a hustler. A hacker’s role is to handle all of the tech aspects of the company, so preferably one with programming skills. A hipster controls the way your product is perceived by the consumers by managing the marketing and user experience aspects. A hustler is the one who works on the business development and sales of the company.

Stages of Investors

Before you jump into fundraising, you have to prepare a business model that can captivate the investors. A business model must fully portray how your startup will run, starting with what product you are selling, how to generate revenue, and what strategy should be used to gain profits. The business model is very important as this is your “map” to success, one that is hard to modify once your startup is already running.

After designing the business model of your startup, you definitely need more funds. This starts from the seed stage, with investments from the angel investors who normally consist of your friends and family. Your startup is not operating yet; thus, you and your co-founders need to convince this small circle to invest their money in your business. After your startup has been operating for quite some time and is proven to be running smoothly, it is time to move on to the early stage or Series A.

In this stage, you can start approaching venture capital firms and strategic investors. The further your startup grows, the faster you can get to the growth stage with more investors. You can go from Series A to Series C, and then proceed to the late stage of Series D. The goal is to finally get an IPO and acquisition. Do not get carried away with selling more stocks. It is better for founders to still have at least 20% of their stocks before reaching an IPO.

What Venture Capitals Look For

Many have tried to attract venture capitals and sadly, many have failed. There are many factors that the venture capital firm looks for in a startup, all depend on which stage the startup is currently standing in. For startups that are still in the seed or early stage, the venture capital will focus on the synergy and chemistry of the founder team.

As for startups that are already in the growth stage, the venture capital will be more interested in the traction of the company. This way, venture capital can observe the progress and potential of the startup. The key for your startup to attract the venture capital is to believe in the value of your company and negotiate accordingly.

The negotiation can only be successful if your startup has the proper valuation. The most commonly used valuation method is the comparable approach, where you take five similar companies as benchmarks, take their GMV (Gross Merchandise Volume) as well as the valuation, and compare them to yours. Determine the performance indicator and market value of those five companies, and then you can get the rough calculation of your startup valuation. ** (E-PID)


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