Startups are being created at a hectic pace. Things are easier if they get bought out quickly. Otherwise there will be the risk of money running out. To prevent such a scenario, they must be backed by venture capitalists with a lot of money. Another technique is to quickly turn a profit to sustain operations.Some liken this to the boom and bust of the dot coms years ago. A smart founder must consider funding for the whole lifecyle of the startup. Perhaps this is causing a need for a different type of venture capitalist that funds a company after it becomes less risky, but needs funds to continue.
One good factor is that the cost of startups seems to be on the decline. Lean and mean boostrapped startups are best to run longer. There is something that probably does not change over time. Startups fail at a certain clip. Something that accelerates the failing is the shrinking nature of the VC market.
How can you prevent your startup from failing due to cash problems? Launch fast, iterate fast, and spend very little money. It is funny. Some people say the formula for the new startup seems simple enough. Get a catchy tech name. Create a fancy logo. Put up a Web 2.0 site. Then release a mobile application. Got it?
