Did you know that the odds of dying in a plane crash are one in 11 million, whereas the odds of dying in a car accident are only one in 5,000? Human nature means we fixate on the big (but unlikely) dangers instead of the day-to-day threats that surround us.
The referendum result has lead to a lot of speculation over the future of the startup ecosystem in the UK, and the analysis is almost universally negative. If you’re really interested you can out exactly how your sector will be affected (especially bad news for property crowdfunding sites apparently), but for startups this is like a fear of catching ebola instead of worrying about the bus that’s heading straight for you.
As a founder you’re far more likely to fail due to obvious, avoidable reasons than because of a shift in the global political climate.
The most common causes of startup death we see are:
1. Building a product that no-one wants/needs
2. Failing to execute (Procrastinating, not getting shit done, entering too many awards)
3. Raising from the wrong investors
4. Hiring the wrong people
There’s no doubt that Brexit will have an impact on both the investment landscape and the market you’re targeting, but it won’t be what kills your company. It might make your addressable market smaller, you might raise at a lower valuation, and it will definitely be harder to hire good talent, but these are only a small fraction of the challenges you’ll face as a founder.
We finished our London cohort in April, and our Manchester cohort is just coming to an end now. This means that we’re working with 20 companies who are at various stages of raising their seed round — some have just closed and others are just beginning their raise.
This week we’re in the middle of the investor lunches (this is our alternative to a demo day) and so I’ve had a great opportunity to talk to Angels and early-stage VCs about whats going on. Their feedback has been incredibly simple — great founders building great businesses will continue to succeed.
Remember that the aim of all this is to build a successful business, not to raise funding. Over the last few years there’s been an over reliance on easy access to capital which has meant a lot of companies becoming lazy when it comes to revenue. The easiest way through of all this — build something people are willing to pay for.
If you do need investment it’s still there. SEIS hasn’t gone away for angels, the VCs still have their funds available, and while everyone is going to be looking twice as hard at deals that come through, they are still making investments. The deals we’re involved with are still going ahead, and commitments are being made to new rounds. It might mean that the next ‘Snapchat for Cats’ app won’t get funded, but as they say every cloud…
I’m not going to pretend that everything is fine, and people far smarter than me are very worried about the long term economic impact. As a founder though you have two choices — live in fear of what might happen, or double down and give yourself every chance to succeed.
If you’re a great team, and want to give your company the best chance then applications for the next Ignite London programme are open now.