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"StartUp Success to StartUp Failure": Why We Aren't Afraid of Our Past Mistakes


This day and age, one of the toughest things to do is to find enough funding for that grand idea that you may have.

Getting the idea is the easy part - notice, we didn't say having it be a good or profitable idea is easy; just getting the inspiration is easy. After that's complete, you have to conceptualize it, usually in the form of a business plan that gets tweaked, re-tweaked, scrapped, started over, and then pulled from the trash unfurled and given new life with one last re-re-tweak.

But then what's next?

Unless you have your own funding, or great uncle penny bags is willing to fund your venture, you are probably out with Nikes to the pavement searching for funders. Funding can come in the form of grants, angel investors, venture capital, or seed funding. Every next great tech start up is looking for that venture capitalist to come through on their white steed, proclaim them the next Google, Facebook or Twitter and cut a check with more zeros than the high school band.

But how often does that actually happen?

In very general terms, roughly 1,500 startups get funded by venture capitalists in the US, and 50,000 by angel investors. VCs look at around 400 companies for every one in which they invest; angels look at 40.

The basic math above tells us that not many, or not enough potentially great ideas get the funding they need, or desire. So what's the next best option?

At Carrington, we help you discover and explore all options available to your venture.

In 2011, we came across a client - we won't name names simply to protect the innocent - who had a great idea, to be the next Rent.com for the New York market; but then go one step further by processing the rental application, conducting the necessary background and rental history checks, and also being the source of online, on-time rent payments for landlords across the city. Then hopefully expanding to other major metropolitans with a can't lose formula.

Anyone who's lived in New York knows, finding an apartment is easy, but finding a great apartment is tough. Also, the best way most people go about finding apartments in New York now, other than word of mouth, is to take the Craigslist route; and anyone who's done this full well knows the potential dangers of Craigslist being the end-all be-all for anything, especially apartment hunting.

The idea was great, we were able to not only pitch the idea to a number of investors and secure funding greatly exceeding the target goal. As the web protocol didn't require much to launch, and real success would be found with the first landlord in the city who signed up for the service; the funding goal was set at a paltry $150,000. We were able to secure funding over $275,000.

So what happened?

Well, (i) a dispassionate founder, (ii) a continually delayed webmaster, and (iii) investors with patience much shorter than their pen stroke. This isn't to say the investors were at fault, not at all. When you make an investing commitment, you expect to see timely results. Once the first project deadline was delayed, the founder decided to re-tweak the part of the business plan regarding the web development, decided against best advice to do the project herself. Did we mention she had no prior development experience.

What resulted shortly thereafter was an even further delayed proj