Essential Tips for Tech Startup Success
January 29, 2021
Roughly 90% of startups fail over time, Investopia reports. Specifically, 21.5% fail in their first year, 30% in their second year, 50% in their fifth year, and 70% in their 10th year. But don’t be discouraged: these statistics simply highlight the need for a solid growth strategy for your own tech startup, and being aware of the risks puts you in a stronger position going forwards. Investing in effective methods of business growth will help ensure your tech company succeeds and thrives into the future.
Build a strong team
If you want to build a successful startup, putting together a strong team is a must. Your team members must possess the essential skills required to grow your business and develop your product or service. To attract top talent, you should also make your business as attractive as possible to potential hires — especially in the early days when you haven’t yet developed a strong reputation. Investing in workers’ comp insurance is one key way you can do this. This insurance not only protects your business from the legal repercussions of workplace accidents, but also helps employees with associated financial expenses. When it comes to what it covers, highlights include coverage for most work-related injuries or illnesses, and pay for employees’ medical expenses, lost wages, ongoing care, and funeral expenses. However, this coverage isn’t available to employees who get sick or injured outside of work.
Find an angel investor
Angel investors (also known as seed investors or private investors) are wealthy individuals who provide startups with financial backing, typically in exchange for an equity share in the company or convertible debt. In fact, angel investors provide 90% of early equity capital for most startups. An angel investor may provide your tech startup with either a one-time investment or ongoing support to help get your business off the ground in the often difficult early stages. Join angel investor groups and business and trade organizations to get in touch with potential angel investors. You can also ask around your family and friends for names. Additionally, explore online platforms to find potential investors. For example, around 13,000 accredited investors belong to the Angel Capital Association.
Staying within your budget and scaling responsibly is key for avoiding premature business failure. Monitoring your spending habits and preventing overspending, avoiding debt, and limiting overhead expenses are the easiest ways to stay within your means. Renting a co-working space instead of using a traditional office space is also an effective money saver — you could potentially save up to tens of thousands of dollars every year this way. By renting a co-working space, you also have the freedom to scale up or down quickly as needed, without having to break an expensive lease or shell out enormous fees.
Above all, growing your tech startup requires effective strategy, dedication and hard work. By investing in smart business growth methods like building a strong team, finding an angel investor, and scaling responsibly, you can help ensure business success in the years to come.