3 Financial Challenges of Start Ups

Every startup starts with a big dream and soon runs into numerous challenges. The successful ones are those who have planned for these challenges in advance. Some of the most significant challenges faced by a start-up are financial ones. In this video, check out how mentor capitalist GR is able to list down the 3 most critical financial challenges for a start-up that revolve around the following:

Ladies and gentlemen boys and girls welcome back to finance tube i am your friend and finance guru ca vishal tucker along with our mentor mr. g ramachandran here for one bonus episode which he promised me that he’ll come back for and i’m so glad sir you made it today so friends of all the comments and the questions that we culminated – there were many many relevant

Questions but due to limited time i am requesting sir to answer this one pertinent question sir the questions that we have pulled together and what we’ve come to is that what are the three key financial challenges that a start-up would face which stops it from becoming successful bhushan it’s a very very significant question that you’re raised and friends let

Me tell you a start-up has several challenges but let me tell you the biggest challenge is a financial challenge the first biggest financial challenges how are you getting the money to boot strap the startup and have you thought about the right amount of money for your idea invariably the startups think that from friends and family i’ll take a small amount of

Money and start the startup i call it drip funding which is dangerous because drip funding never takes you forward because you don’t know when the balance one is coming so as far as a startup is concerned the first financial challenge is to size up the money needed and when you bootstrap the startup you need to collect the money upfront have it in your bank

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Account before you start the start off the second challenge is to control your monthly cash but cash burn can be phenomenal if you just get caturday as a startup entrepreneur we need to understand that money is a scarce commodity first katate what happens is initially when we had that fund we think we have sizeable amount of money we want to do everything we

Want to look at technology we want to look at marketing we want to look at sales we want to look at people and we want to look at infrastructure in the process unconsciously we exceed the budget the moment we exceed the budget we are done and dusted we are a gone case so we need to understand that the cash burn is very critical the budgets are sacrosanct that

Means you’ll have to conserve the money that you have so that the money that you’re raised can be there with you for the next 12 months with you so that you can at least be there in the system for some time before you can go for your angel funding the third and the most important financial challenge that you face is you need to understand that money will run out

Quicker than you anticipate it and sales may not pick up as you end reception what do you do you may not get mezzanine funding or debt funding because you’re a start-up you don’t have a track record and no bank wants to give you money the problem with banks and other institutions which are lending institutions is they want to give you money when you have enough

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Money and you’re profitable and then you need money no one is willing to give you money so when you’re going to be running out of money you need to be ensuring that you have raised the next round of funds before you have run out of money completely that means four to five months before you run out of money you need to be raising your angel funding or series a

Or series b so that resource raising becomes a very critical activity in order to ensure that you are able to get through this hump for the next 24 months before you start making a cash surplus and becoming a success story thereafter it’ll be a case of valuation and money will come to you and you’ll be into valuation creating value and wealth creation so please

Understand finance for a start-up is very critical thank you so much here for spelling it out in a very simple manner what me and my viewers have found is that your ability to present a particular concept in simple words and easy flow makes it very easy in fact few of my friends were found taking notes during the video and they said that they have discussed these

Concepts with their team internally and they are going to implement the principles that are suggested by you so i think that that that is the most warm response that that we could have ever received on our time lecture any time wish it’s been very very interesting being in your channel and i hope that everybody has been at the top of it thank you so much friends

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Thank you so much your viewers for honoring our mentor of course i’m saying our mentors who is your mentor as well as much as he is ours so if you still have any questions with us you can post them in the comment section and i can have him replied through an email or something but make sure that you keep learning and you keep your spirits and energy levels high

And those of you who are engaged in a start-up make sure that you follow his advice religiously because he has seen more startups and have got more successes than what he could imagine so let’s not reinvent the wheel friends and yes like every time i’m going to say again and again that application is everything if you just listen to my videos and if you don’t

Apply the principles given you will not stand to benefit out of it so please apply the principles and i look forward to seeing you again in the next episode with something new with something different something exciting and yes if you haven’t subscribed to our channel subscribe to our channel today our channel financed you

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3 Financial Challenges of Start Ups By Finance Tube

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