Offline travel app Maps.me lands €41M to roll out these key features; find out here

Maps.me

Offline travel app Maps.me has raised $ 50M (approx €41.3M) in a fresh round of funding led by Alameda Research, a Hong Kong-based investment firm and liquidity provider. Genesis Capital and CMS Holdings also participated in this round.

Use of the raised capital

Reportedly, the new funds will help the company to roll out a multi-currency wallet on Maps.me and enable a decentralised finance (DeFi) ecosystem on the platform. With DeFi, it looks to develop the tool into an “everyday app,” making Maps.me more mainstream.

This means that the Maps.me 2.0 version would allow users to store values and earn yields of up to 8 per cent, as well as make both domestic and international transactions. The app would also have a cashback feature on its transactions.

“By embedding and democratising access to yield-earning finance to millions of users via an everyday app, Maps.me has the potential to really propel DeFi mainstream adoption and bring a groundbreaking technology to the masses,” says, Sam Bankman-Fried, founder and CEO of Alameda Research and also crypto exchange FTX.

About Maps.me

The company was founded in 2011 by Alex Zolotarev, Siarhei Rachytski, Victor Govako, and Yury Melnichek. Maps.me is a free mobile offline map for travellers which covers all countries of the world which are available for download from within the application.

Maps.me gets its map data from OpenStreetMap.org (Wikipedia of maps) – an open database of geographic information which is updated by the community of 5.7 million contributors. The application includes the map data in full details with streets, house names, tourist attractions, hiking/cycling trails, local businesses and other key information. 

After the download, the maps and all the built-in features work offline and do not require an internet connection (map, search, filters, car/pedestrian/bike/transit routing and navigation with voice instructions). With the internet connection, you can also get free car traffic in 38 countries and access a public catalogue with thousands of travel guides and itineraries, created by professional companies, individual bloggers, and active travellers.

Currently, the company has over 140 million installations globally, available for iOS and Android and translated into 28 languages. According to the Coindesk report, over 58 per cent of Maps.me users come from the European continent, and more than 70 per cent are between the ages of 18 and 40.

The company is said to have been registered in Cyprus, however, as per its LinkedIn profile, Maps.me is currently headquartered in Amsterdam.

About Mail.ru

In 2014, Mail.ru Group, an Amsterdam-based Russian internet company, acquired 100 per cent stakes of Maps.me for RUB 542M (approx €6M). According to Mail.ru, in 2019, the travel app’s revenue amounted to RUB 159M (approx €1.7M) with an EBITDA loss of RUB 25M (approx €279K).

Maps.me was recently sold to Daegu Limited for about €17M.

Mail.ru Group is an internet company in the high-growth Russian-speaking Internet markets (Russia is Europe’s largest Internet market measured by the number of users, comScore). The company claims to own Russia’s leading email service and is one of Russia’s largest internet portals. It operates all three of the Russian language social networks, Vkontakte (VK), Odnoklassniki (OK) and Moi Mir (My World), and Russia’s largest online games business. 

In 2013, Mail.ru Group launched its first global project My.com that provides a suite of communication and entertainment apps.

Startups – Silicon Canals

[The Bouqs in Yahoo Life] These Flower Delivery Services Will Help You Make a Loved One’s Day

Fresh flowers have the magical ability to instantly brighten a mood. Science says so. Whether you’ve got Valentine’s (or Galentine’s Day) presents, an anniversary, or a gift for your BFF’s birthday on your mind, sending a gorgeous bouquet is an easy way to remind friends and family you care, even from afar.

Read more here.

The post [The Bouqs in Yahoo Life] These Flower Delivery Services Will Help You Make a Loved One’s Day appeared first on OurCrowd Blog.

OurCrowd Blog

Berlin-based Delivery Hero launches its own VC fund; plans to deploy €50M initial capital in these sectors

Delivery Hero

A few days after raising €1.2B with a capital increase, Delivery Hero, a Berlin-based food delivery platform, has launched an independently managed early-stage venture capital fund – DX Ventures. With the fund, the German company is planning to invest in disruptive founder-led companies.

Duncan McIntyre, Managing Director of DX Ventures, says: “Being a family of founders, investing in entrepreneurship is an integral part of Delivery Hero’s journey. We understand the opportunities and challenges these startups are facing because we have gone through them ourselves. Delivery Hero has built a strong track record of investing in leading technology companies and gained a deep understanding of the global delivery and food industries. We pride ourselves on being able to offer support to founders and the companies we invest in and guide them on their path to lasting success.”

Plans to deploy €50M initial capital

At present, DX Ventures has an initial capital of €50M to invest in startups across various industries including, on-demand services, food technology, sustainable innovation, artificial intelligence, fintech, and logistics.

Duncan McIntyre, who joined Delivery Hero in 2014, heads DX Ventures. Notably, he has helped the company with its listing on the Frankfurt stock exchange in 2017, and expansion into the different markets as well through over 30 M&A transactions. 

Centred on building long term partnerships

The DX Ventures team is responsible for over €500M of minority investments across a wide range of industries, including global success stories such as Rappi, Glovo, and Impossible Foods. 

DX Venture says that the fund’s approach is centred on building long-term partnerships with founders to provide support throughout the lifecycle and actively create value.

Fundraising, deal approval and more

A few days back, the German food delivery company raised €1.25B by issuing 9.44 million new shares to institutional investors at €132/share, increasing its current share capital by around 4.7 per cent. 

Notably, the Berlin food delivery company also received regulatory approval of its $ 4B (approx €3.6B) Woowa Brothers takeover deal as well. The company expects to receive the final written approval and closing to occur in the first quarter of 2021.

Currently, Delivery Hero operates in 50 countries across Asia, Europe, Latin America, the Middle East, and North Africa. It is valued at €24.5B and raised $ 6.6B (approx €5.4B) in funding to date. Headquartered in Berlin, Germany, the company has more than 27,000 employees.

Startups – Silicon Canals

[Tala in Opera News] Do You Know Ipesa? These are the Best Mobile Loan Apps In kenya

Tala is top mobile loan app,its effective , reliable and convenient.Tala initially called mkopo rahisi then it changed it name to Tala.Within 5 minutes after sending your application,you are certain to get your money sent to your phone.

Read more here.

The post [Tala in Opera News] Do You Know Ipesa? These are the Best Mobile Loan Apps In kenya appeared first on OurCrowd Blog.

OurCrowd Blog

These 5 VCs have high hopes for cannabis in 2021

Cannabis has always been essential to some. While it had seemed to start last year in a bit of a correction, demand for it during the pandemic (and its widespread designation as an essential business), created a breakthrough for the industry. We saw early signs of that in our cannabis investor survey back in May of 2020.

Today, TechCrunch has surveyed five key investors who touch different aspects of the cannabis business, based on our TechCrunch List of top investors who founders recommend to us, and other sources. We asked these investors the same six questions, and each provided similar thoughts, but different approaches. Despite remaining headwinds, the future is looking up for most cannabis businesses, according to these investors.

Morgan Paxhia, managing director of Poseidon Investment Management, put it this way: “2021 could be nothing short of amazing for our industry. We expect capital flows to pick up massively from pent-up demand, good public markets bringing more IPOs, lots of M&A and new innovative startups coming on scene. We see opportunity with social equity for the first time, driven by private markets rather than poorly constructed regulations. It’s going to be fun!”


Morgan Paxhia, managing director, Poseidon Investment Management

2020 was a blockbuster year for cannabis. What advice are you giving your portfolio companies entering 2021?

Typical mantra for us, stay focused. Markets, deals and valuations are volatile in our industry but we all have to do our best to tune out the noise and focus. I’d say a great example of a team with focus is GTI. They have executed against a strategy while many of their supposed peers have done very irrational deals, impaired shareholder value, etc. GTI continues to march down its path and their results are showing.

How is COVID-19 changing the cannabis landscape?

2020 was an inward-facing year as most companies could not travel, capital was tight and macro was uncertain. This inward work has led to a lot of fundamental improvements for operators. There are others that got one last puff of wind but their businesses are too impaired and will continue to fall to the wayside.

2021 could be nothing short of amazing for our industry. We expect capital flows to pick up massively from pent-up demand, good public markets bringing more IPOs, lots of M&A and new innovative startups coming on scene. We see opportunity with social equity for the first time, driven by private markets rather than poorly constructed regulations. It’s going to be fun!

From retail to SaaS to research, there’s a lot of inroads to investing in cannabis. What sector of the business do you see has the best opportunity for growth in 2021?

We are bullish on select state markets. For example, new adult-use markets in NJ and AZ and existing markets with new growth prospects opening in CA and NY.

SaaS could get very interesting as there are several players reaching scale that are garnering mainstream attention.
International opportunity is mostly Mexico. It is the largest federally legal market that will just be opening in 2021. Many have not taken this one seriously but we have and are very proud of the efforts that went to moving such a monumental step forward.

The history of drug enforcement in the United States has been deeply unjust and racist; as we enter a period of growing legalization, are there things that startups and investors can do to address that inequity?

The industry, meaning established companies, entrepreneurs and investors need to drive solutions here. Regulations have been terrible and only exacerbate the issue. We have been putting a lot of thought into this area for years, watching various aspects such as the missteps taken by government and the unfortunate poor intentions from supposed investors.

We see a path emerging here that is collaborative, simple and should be attractive to capital providers. Stay tuned.

Who are some leaders in the cannabis space — companies, founders, growers?

  • My sister Emily is a co-founder and rock star! She is a true leader in this space on so many levels.
  • Ahmer Iqbal, CEO of Sublime — Ahmer took the role at a very challenging time and with very little capital was able to rebuild the company into a leader in the CA market.
  • Jason Wild — Not only is he a savvy investor, he puts his money where his mouth is. Outside of Poseidon, I do not know any other person in this industry that puts up so much of their own money into what they believe in.
  • Coleman Beale, CEO of Bastcore — If you are not familiar with the industrial hemp renaissance in the U.S., look no further. This technology-driven hemp-processing company is rejuvenating textiles in the U.S., using domestically grown hemp and processing for uses in such textiles as denim.

    Startups – TechCrunch

These powerhouse female VCs are funding Amsterdam’s most innovative and diverse startups

eva de mol female vcs

If you’ve been following this site for a while you would have noticed that startups and scaleups from Amsterdam or the Netherlands raise funding all the time. However, only a small percentage of capital in the Netherlands goes to female entrepreneurs. However, these women are determined to change that and give female entrepreneurs a fair share in raising funds.

Amsterdam supports RISE – Female Hub

With the announcement of its financial support for the RISE – Female hub Amsterdam, the City of Amsterdam creates more equal opportunities for women and men in its startup ecosystem. The city invests €750k in the programme. This allows RISE to unite twenty Amsterdam-based organisations to create a three-year programme for ambitious women at different stages of their career.

Read also: Amsterdam is a melting pot, yet a new survey says its startup scene isn’t: what needs to change?

Before the programme starts, we take a look at the game-changers – the women leading the way. As entrepreneurs, ecosystem builders and now the female VCs shaking up the world by striving for more diversity and equality. These are the VCs you must know about: 

Eva de Mol – CapitalT & Fundright

‘We need to do better’, said Eva de Mol (pictured above) in an interview with Silicon Canals just over a month ago. She was talking about the fact that startups with a female founder receive barely any funding. In the first nine months of 2020, just 1 per cent of venture capital in the Netherlands went to startups led by women. De Mol: “Unacceptable and sad in the twentieth century.”

Read the interview: With female founders receiving hardly any funding, Amsterdam’s push for diversity continues

It’s strong language from a woman with a strong opinion on equality in the startup ecosystem. As a partner of Amsterdam-based CapitalT, which invests in early-stage startups, she’s aiming to change that. Notable examples are female-led businesses as WizeNoze and Blockparty. De Mol is also a member of the Fundright initiative, which is motivating VCs in the Netherlands to invest more and more often in female founders.

Constance Scholten – Slingshot Ventures

Constance Scholten (image: Camarilla)

As an entrepreneur turned investor, Constance Scholten knows what it takes to make it as a woman in the male-dominated startup world. She started her journey in the ecosystem at Travelbird, after which she founded ‘worlds smallest social network’ Camarilla. Her creation was acquired by HR-platform Appical in 2017.

Her experience as an entrepreneur is now being put to good use as the Human Capital Director at Slingshot Ventures. The relatively new VC that has already backed well-known names such as VanMoof and Tiqets. Scholten’s name may also ring a bell from one of the many, many interviews she’s done as one of the most inspiring examples of female founders.

Willemijn Verloop – Rubio Impact Ventures 

Willemijn Verloop

If you’re looking for women that make an impact, look no further than Willemijn Verloop. As the founder of War Child Netherlands, this entrepreneur has been actively making an impact for over a decade now. Looking for more positive change, she then moved on to found Social Enterprise, which supports companies that prioritise their positive impact on the world.

Naturally, when this entrepreneur turned into VC, she kept on looking for positive change. With Rubio Impact Ventures, formerly known as Social Impact Ventures, she’s investing in the future of social entrepreneurs. For instance, Rubio recently participated in the €16M Series B funding round of Mosa Meat, that creates lab-grown beef.  

Marleen Evertsz – Nxchange

Willemijn Evertsz (Image: Nxchange)

Leading the way in fintech, Marleen Evertsz is a force to be reckoned with in the financial business. She started her career at trading firm Optiver, where she worked her way up to managing director responsible for all US activities. She then proceeded to found GoldRepublic, an online marketplace for actual gold. 

Her latest endeavour is Nxchange, which she co-founded. Nxchange is a decentralised stock exchange which connects investors with those looking for funds. The platform makes it possible to place and trade securities on a regulated platform without the intervention of a bank or broker being required and is set to revolutionise capital market transactions. No wonder Evertsz’s new venture won prestigious innovation prizes, all of which is proof that she’s one of the leaders in fintech innovation.

Janneke Niesen – CapitalT

Janneke Niessen (image: CapitalT)

A serial entrepreneur, an investor with multiple exits, a columnist for some of the most popular publications in the country, a mentor to startups, a novelist inspiring girls to pursue a career in tech – the list of Janneke Niessen’s accomplishments goes on and on. She was also recognised in the EY Entrepreneur of the Year, Deloitte Fast 50 or The Next Women 100. 

read also: Only 5.7% of Dutch VCs put their money in startups with a female co-founder

Niessen co-founded CapitalT, where the above-mentioned Eva de Mol also works. She strives towards shifting the balance of VC money to female-founded startups. Niessen also co-initiated the Inspiring Fifty, the European programme that highlights the accomplishments of women in leadership positions within the tech industry. 

Jacqueline van den Ende – Peak Capital

Jacqueline van den Ende

When Rocket Internet asked her to start up an online real estate platform in the Philipines, Jacqueline van den Ende took up the challenge. As founder and CEO, she built up the company to an organisation with over 100 employees. 

That entrepreneurial spirit and experience eventually brought her back to her home country of The Netherlands, where she became a partner of Peak Capital. As one of the leading Dutch investors in SaaS and online marketplaces, it has some notable exits like Catawiki, CheapCargo and IENS. As a partner, Van den Ende paves the way to the top for other women. 

Laura Waldenström – INKEF

Laura Waldenström

Laura Waldenström first made waves as an entrepreneur in the lively Swedish startup scene. She co-founded market intelligence firm Previro. With Waldenström as COO, it didn’t take long for the startup to attract multiple large clients from different countries. 

After gaining experience as an entrepreneur, Waldenström landed in Amsterdam where she is now a senior associate at INKEF Capital. She led the recent Series A funding round for the workplace communication solution of Happeo. The originally Finish startup has an office in Amsterdam as well and is ready for some rapid growth with Waldenström on board.

Anieke Lamers – VC coach

Anieke Lamers

Also looking for impact wherever she goes is Anieke Lamers. As an investment manager at Social Impact Ventures, now known as Rubio, she was involved in sourcing and making deals with startups in the area of eHealth, cleantech/circularity and eLearning. She is also the founder of the Next Generation Impact Investor network, which connects impact funds from all over Europe to share knowledge and experiences.

Late last year, Lamers moved on from being an investor and decided to use her experience to mentor and guide founders and VCs in their quest to make a positive impact on this world. From the start of her career, Lamers has also been a strong voice for more female representation in the business world. She even established an ‘old girls network‘, which connected female professionals to help each other reach the top in a male-dominated world.

Therese Liechtenstein – M Ventures

Therese Liechtenstein (image: Mv Ventures)

An impressive career in the financial and healthcare business and with a PhD in Immuno-Oncology from University College London, an MSc in Biomedical Sciences from the University of Amsterdam, and a BA in Biology and Business studies from New York University. These qualifications are clear indications that Therese Liechtenstein is not relying on her royal blood to get ahead. Because yeah, she is also a princess of the actual country Liechtenstein.

But more so, Therese Liechtenstein is an accomplished principal of Amsterdam-based M Ventures. She manages the healthcare fund with companies like Forx and Plexium in the portfolio. Thanks to her background, she is also a sought-after speaker for numerous biotech and healthcare conferences.

Simone Brummelhuis – Borski Fund

Simone Brummelhuis

Being a lawyer for prestigious firms, publishing her restaurant guides, owning and selling IENS – the largest online restaurant platform in the Netherlands – to Tripadvisor, and working her way to the top of organisations like Schiphol and Rabobank. Simone Brummelhuis has had a career one can only marvel at. And she’s not even close to being done. She also founded TheNextWomen, which inspires, connects, and advises female entrepreneurs since 2009.

Her latest adventure is called Borski Fund, named after 19th-century investor Johanna Borski. Brummelhuis is its director and partner. It’s a VC fund with a twist that suits her well: it has a strong focus on growth capital for female founders and managers. By actively investing in startups and scaleups with female (co-)founders, Brummelhuis takes new steps in restoring a gender balance and increasing diversity.

Laura Rooseboom – StartGreen Capital

Laura Rooseboom (image: StartGreen)

With a planet in distress, we need people like Laura Rooseboom. She is managing partner of StartGreen Capital, the largest fund manager in the field of sustainability in the Netherlands. Rooseboom has been striving for a positive impact all her career. As the director of Doen Ventures, she was one of the first VCs focused on sustainable companies. She is also the co-founder of OnePlanetCrowd: the crowdfunding platform with a focus on solutions with a positive impact.

Besides having an impact on the planet, Laura also has an impact on the diversity within the startup ecosystem. The above mentioned Borski Fund is an initiative of StartGreen Capital. As a partner in the fund, Rooseboom actively aims to fund more female entrepreneurs or female-led startups.

Startups – Silicon Canals

Don’t Allow These Debunked Myths To Kill Your Dream

business-innovation-dreamStarting an entrepreneurial business, or maintaining the competitiveness of a mature business, requires innovation. Yet everyone I know seems to have a different perspective on what constitutes real innovation, and why is seems to happen so rarely. Another challenge is to debunk some of the common myths that seem prevent many from even assuming they can innovate.

As a starting point, I like the Wikipedia simple definition of innovation as “the application of better solutions to meet new requirements or market needs.” I also enjoyed the classic book, “63 Innovation Nuggets for Aspiring Innovators,” by George E. L. Barbee, based on his 45-year career and work as an innovation guru with several Fortune 100 companies and the Darden School of Business.

Some of the most common innovation myths that Barbee mentions or I have encountered in my work with entrepreneurs around the world include the following:

  1. True innovation can only come from R&D and geniuses. In reality, the best business process innovations usually come from regular employees on the front line of your business, just trying to do a better job and better serve customers. Many product innovations come from quality improvement focuses, like the Japanese Kaizen initiative.

  1. Innovation must be driven top down by visionary leaders. Some innovations are clearly implementations of visionary ideas, but anyone at the operational level can think outside the box, individually or as a team, to suggest and implement innovations. Many innovations, including Post-It notes and superglue, were even invented by accident.
  1. Real innovation only happens in entrepreneurial organizations. Startups may be quicker to adopt innovations, but there are clearly some large problems than can only be solved by companies with large resources. Other innovations, such as the ones from Kaizen initiatives, can only come from established organizations and processes.
  1. Innovation is random, and can’t be orchestrated. Current research indicates that innovation is a discipline, it can be maximized, measured, and managed through formal processes. Peter F. Drucker outlined the key elements of this discipline, including methodically analyzing seven areas of opportunity, in a classic article on the subject.
  1. Individuals who are innovators are born, not bred. Research published by Harvard many years ago in a book, “The Innovator’s DNA,” concludes that innovation is about 30 percent individual genes and 70 percent learnable and driven by motivation. The focus must be on five discovery skills of associating, questioning, observing, networking, and experimenting.
  1. Solution innovations need to be perfected before going to market. These days, with markets and technology changing so rapidly, it’s impossible to verify an innovation before taking it to market. Thus I recommend the minimum viable product (MVP) approach with iteration, to test innovations until the product or service really meets today’s customers.

  1. “Thinkers cramp” and “organization cramp” limit innovation. Innovation and creativity are two different things. Creativity is more about ideas, while innovation is all about implementation. The “writer’s cramp” type of block on ideas need not apply to the implementation of measurable and specific improvements and innovations in business.
  1. It’s impossible to innovate in a staid complacent culture. Innovations come from people, not culture. When people change, due to new leadership, new motivation, or business changes, innovations occur, which can lead to culture change, rather than the other way around. Complacent cultures cause business failures for reasons well beyond lack of innovation.

You probably know more of these myths, but the message here is that initial innovation is critical to every startup, and continuous innovation is critical to the survival of every business. The market and your competitors never stand still, so every moment your business stands still, it is losing ground.

Don’t let a few outdated and unproven innovation myths stop your business from achieving the impact and lasting legacy of your long-term vision.

Marty Zwilling

Startup Professionals Musings

4 Common Reasons Why Startups Fail (and How to Overcome These Obstacles)

Most startups fail—up to 90% in 2019—and unfortunately, more often than not, the founders themselves are responsible. Financial reasons are often cited as one of the most common factors for startup failures, and these are, of course, hugely important. I have also found, however, that there are often more personal reasons why startups fail. These include dealing with personal relationships both within and outside the business and conflicting co-founder visions.

In this article, I will share some of the real reasons why I think startups fail that I have observed firsthand as a startup founder.


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Conflicting co-founder expectations

Starting your business with a co-founder can be beneficial for many reasons. Studies have found that investors can be less likely to look favorably on solo entrepreneurs. However, conflicting co-founder expectations can lead to disagreements that are fatal for startups.

Noam Wasserman of Harvard Business School found that 65% of promising startups broke down due to disputes between co-founders.

Many founders partner with family or close friends. Take, for example, Jerry Greenfield and Ben Cohen of Ben and Jerry’s fame, who were famously friends from childhood.

Although it seems ideal, the familiar nature of these relationships can cause upset further down the line, as partners believe that they know each other’s intentions without ever discussing the specifics. To avoid any problems, co-founders, regardless of any existing previous relationship, should document the responsibilities of each partner, investment amounts and what will happen if one party wants to withdraw.

Ideally, this should be a formal agreement drawn up by a lawyer, or at least an agreement documented on paper. Having this document in place from the start can help entrepreneurs avoid emotionally and financially costly legal disputes that can even end up with partners in court. This can also help the company withstand the loss of one of its founders.

My experience with my own company, SYNC, experienced a similar challenge, as my co-founder exited the company before we even got off the ground.


Related: Tips to Help Find Empowerment Through Embracing Failure

Dealing with personal relationships

Entrepreneurs sometimes assume that running their businesses is a personal decision and thus embark on their project without consulting their families, expecting unqualified support. The demands and stresses of being an entrepreneur can lead to relationship breakdowns or the failure of your business due to problems at home.

Remember that your family is a stakeholder of your business, albeit sometimes an indirect one, and your ventures pose risks for them, too. Tension in families can leave entrepreneurs unable to focus on solving problems within their startups. Always talk to your partner or family before starting and win their support beforehand to minimize the chance of tensions disrupting your business or family life.

As discussed above, many co-founders are often friends, family members or even married couples. Reddit, for example, was started by two previous college roommates, Alexis Ohanian and Steve Huffman. Although this dynamic can be successful, it can also be challenging, as sometimes necessary conversations are avoided to prevent feelings from being hurt.

Embarrassment about money and failure

Failure can also be due to the unwillingness of business owners to talk about money or admit financial restrictions.

Take this personal example: In the past, I’ve accepted late payments for clients that we worked with because they were our first few clients that signed on. These constant delays, which ranged between a couple of weeks to six months, put a lot of strain on cash flow in the early days and were a constant source of worry.

What I learned is that it is essential to think of all of your stakeholders and how a decision may impact them. If you fail to chase down a payment, you are damaging your partners and employees who have invested their energy and time to make the business run.


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Building profit versus cash flow

Focusing on profit at the expense of cash flow is a common mistake I have noticed among entrepreneurs.

A study by U.S. Bank found that in 82% of cases considered, inadequate management of cash flow or lack of understanding of cash flow was a contributing factor in the failure of small companies.

Entrepreneurs are sometimes tempted to cut corners in order to increase profits. Unlike cash, profit is a number generated by interpretations and accounting rules. It can give a false illusion that a company is doing well.

Instead of cutting corners and quality, I have found that businesses most often succeed by focusing on scaling the business and getting to economies of scale for better returns. Airbnb, for example, grew from a small operation in San Francisco to over six million rooms in 81,000 cities across the globe by 2019.

I ran into a similar problem at the beginning of my entrepreneurial journey when I looked at creating profitability from day one. This doesn’t sound bad on paper, but for a services industry, there is a cost to building a portfolio and a steady list of clients that every company needs. I had to reassess my business value and look at building cash flow until we got to a point where we could consider putting profitability at the forefront of all new business.

To this day, I still regret saying “no” to certain prospective clients, because working with them would have meant a lower profit margin compared to our average client. However, they would have made great case studies and eventually would have allowed us to potentially upsell and grow the value of the client over time.

Startup founders who find themselves with cash flow problems should aim to scrutinize each spending decision, especially in the beginning stages. 

Key takeaways

The various factors that frequently cause startups to have such a high failure rate have been explored and analyzed many times. In my experience, however, entrepreneurs should focus on the often-overlooked areas to ensure the longevity of their venture. For example, the responsibilities of each partner, relationships within and around business, and concentrating on the right priorities for business growth and scalability.

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