In a recent case, a startup founder went all the way and returned the money to one of the major investors due to differences in political stance. This is a rare incidence but not unheard of. At Instagram for example, one of the investors had backed the startup at a time when the company was into a much more basic check-in service. Later when Instagram emerged in its present day avatar, the same investor did not ask for money back, but simply refused to invest further. Whenever such cases of firing investors take place, it is due to one of two commonly cited reasons. One is when the startup loses money but still has some left in the bank, so it is returned to minimize investors’ losses as a measure of goodwill. The other is when companies change track and diversify into something else, so original investors are given such a chance to reassess. One such case of a pivot was with Next-door which had started out as Fan-base before a business innovation saw the model change. But such cases are rare due to the fact that all the key stakeholders need to agree on such terms.

Source:http://fortune.com/2017/03/30/startups-divest-investors/

Uploaded Date:02/06/2017

As per data provided by the US Small Business Administration, half the startups that began in 2011 have already died down while about twenty percent of those founded in 2014 did not even complete a year. A lot of MBA students wrongly assume that disruptive technology is the only way forward for a startup to thrive. There are several reasons why a startup may not survive. The most common factor as provided post business analytics done by CB Insights is that they do not serve any existing market need. Another major reason is the fact that they quickly run out of funds. Their cash flow models are not efficiently run, and not every startup gets a handsome seed fund to begin with. The inability to assemble together a proper team is the third common reason for failure cited. Another is excessive competition. When one startup does well in any field, or any idea catches up, several others try to pounce in, often with limited results. Finally, it has been observed that startups wind up due to pricing issues. This is different from funding as a lot of new business entrants keep entry prices lower than market rate to attract projects. These get unsustainable in the long run.

Source:https://www.forbes.com/sites/sageworks/2017/05/14/why-startups-fail-and-how-to-avoid-failure/#2964ae19a3b9

Uploaded Date: 20th May 2017

A lot of youngsters are more open these days to working for startups instead of large established corporations. Thus startups must also plan early on how to get the best of talent and then create a pipeline for the same. Proper talent management systems must be created right from the outset. The recruitment must be done with clear set timelines, rather than just thinking of surviving the day or the business quarter. An assessment must be made of the skills the recruiter is looking for. For youngsters looking to grow, a startup can at times be a hurdle, so clear growth paths must be designed. A mistake lot of company founders commit is to recruit people who have similar personalities to themselves. Instead people with complementary skills must be selected to complete the organization and help it grow beyond the founder’s vision alone. At times, the pipeline will need to get pruned as a lot of non-performers will also exist. Unlike the luxury of any established firms, startups must without delay execute this function.

Source:https://www.forbes.com/sites/roncarucci/2017/05/09/how-to-scale-your-startup-with-the-best-talent/#705564753a05

Uploaded Date: 16th May 2017

After the first three years of any startup, a crucial period emerges where the founder’s innovation and corporate strategy are less important than the funds available to the organization. It is at this stage, that the founder needs to decide how much power and control to retain within the firm. Increased funding from investors naturally leads to reduction in control, although this gets necessary. Studies have in fact found out that per additional role that founders retain such as both chairman and CEO, the company value reduces by between seventeen and twenty two percent. Additionally, there is a whopping thirty five to fifty one percent reduction in the ability to attract financing. Investors however need to conduct a detailed due diligence as replacing a charismatic company founder too early may have negative implications for its brand image.

Source:https://www.strategy-business.com/blog/For-Startups-Giving-Up-Control-Is-Key-to-Creating-Value?

Uploaded Date: 16th May 2017