85% of startups will fail within first 2 years and less than 10% are able to raise external finance. In this video, entrepreneur and angel investor Petri Lehmuskoski shares his experiences on why startups fail, how to validate your business idea, and how to find a right investor.
He talks about the five stages of startup development: idea, hallucination, externally shared vision, business validation, innovation. He says each stage requires loads of learning and each stage requires different type of financing.
Focusing on the finance, he says that too much money will create problems. Companies with limited funding are more successful. Ideas are just the multiplier of execution (Derek Sivers), you have to learn to crawl before you can run. Early startup mission is generate learning, not revenue!