As a business consultant, I see more entrepreneurs not able to obtain funding than I see entrepreneurs obtaining the necessary money to see their ideas transformed into a viable business. This difference is very large. It maybe one idea is funded for every 10 that go unfunded but it may be as high as 1 is funded with 100 never obtaining a nickel. This kind of difference and the struggles of the entrepreneur who is frustrated by not ever seeing his idea transformed into reality and making him rich, prompts the question; is there enough funding for new ideas and companies? How one market’s the idea can sometimes be more important than the idea when it comes to obtaining venture capital.
The entrepreneur would quickly and resoundingly answer the question with a “no”! Many entrepreneurs have a hard time or are unsuccessful in getting money. Their idea is not the problem; it is that there is not enough funding available. The reality is that making additional money available to this group of entrepreneurs who have been unable to secure funding, will not create more companies and in turn more jobs. How can this be?
These ideas, that are not funded, whether for a service or a product, are really not “better mouse traps” or the entrepreneur is seen by potential investors as unable to successfully implement or allow the things required to be delegated to achieve a successful venture.
Most people do not appreciate how hard it is to provide a service or make a product, inform their target market about the product, get the product or service to the person who wants to use or buy this service or product and finally make a reasonable profit while doing and paying for all the previous mentioned tasks. Some entrepreneurs fail to factor in what capacity and talent would be needed to accomplish the launch of their idea.
Entrepreneurs become passionate about their idea, as they should, but they also need to be realistic. Just because you can produce a fuel for the combustion engine that is made from a renewable source, and will not cause pollution why would people pay $10 a gallon for it when they can get a petroleum based fuel for under $3 a gallon?
Would you invest your money into a company the produces a product that the consumer is willing only to pay $15 for and it costs the company $30 to make?
What about the entrepreneur who has a unique product everyone wants but the entrepreneur does not know how to delegate? He is brilliant and can do everything better than anyone else. No one else can do a task well enough to satisfy this entrepreneur! This entrepreneur needs to make the sales call, make the product, ship the product, and do all the administrative tasks. The company can make, sell, invoice or collect enough to make the company viable. This is an example of a great idea headed nowhere.
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