cash is king is wrong

The main idea of ​​my post “Cash is king” and the previous one “The Metaphore of the tub” was that cash is the most important thing in startups. Although I confirm the general validity of the post, I would like to expect on the idea “cash is king” and make some exceptions.

I have known some entrepreneurs so focussed on raising funds for their project, that they forget everything else. Continue Reading…

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Weareknitters web3

Photo: Alberto Bravo and Pepita Marin, We Are Knitters founders.

Startup: WE ARE KNITTERS, Madrid. www.weareknitters.com

Activity: We sell kits online to knit your own clothes, including 100% wool or cotton balls from Peru, wooden knitting needles and pattern. All in one kit recyclable supported with video tutorials for beginners. We operate in Spain, Germany and the UK. Continue Reading…

Photo of zizzybaloobah on Flickr

In business and investment the expression “cash is king” is widely used. This idea is the highest priority in terms of startup finance. A startup can assume that the first year will not bring benefits, provided it has clear when they will start. But what makes a high percentage of startups disappear shortly after its creation, is the red or running out of cash. Cash is one of the three legs of the financial plan, along with the income statement and balance sheet. This is most important in the case of startups. So, “cash is king”. Continue Reading…

Foto weareknitters.com

“We are knitters” is a company created in 2011 by two 25 year old entrepreneurs, Maria Jose Marin and Alberto Bravo. These entrepreneurs have the double merit of launching an innovative product that was originally traditionally-based and procuring prestigious investors.

They have recently published on their website http://www.weareknitters.com that their company has raises 150,000 euros from some investors: the venture capital firm Cabiedes & Partners and two business angels François Derbaix, Toprural.com founder and Yago Arbeloa, president of the Spanish Association of Investors and Internet Entrepreneurs. The new capital will be use to accelerate the company’s international expansion in Europe.

The company’s online shop sells kits with everything necessary to knit wool and cotton clothing such as sweaters, scarves, hats, etc. They also offer simple video tutorials to learn how to knit from scratch.

In my opinion the most interesting aspects about this company are: Continue Reading…

What is a Start-Up?

29 May, 2013 — 3 Comments

A startup is an innovative and newly created company with high potential for growth. These companies are in their first stage of development and are also innovative. So they have both a high risk of faillure and an enormous potential of benefit.

Another good complementary definition is offered by Steve Blank : “A startup is a temporary organization designed to search for a repeatable and scalable businessmodel”:

  • Temporary organization: a startup always, sooner or later, finishes its launching phase and if it is successful, it leads into the growth phase and if not … it shuts down (or even worse if its founders decide not to close it, then it becomes a zombie startup). But even the last case, it is no longer a startup because it is no longer in its launching phase .
  • Searching for a repeatable and scalable business model: we are talking about startups in the XXI century, when the pace of change accelerates and innovative companies have to deal with a highly uncertain environment. Entrepreneurs are hardly sure of their business model when launching a startup. They do create their startup to find the right business model, the one which generates recurring revenues (repeatable business model), and also the one which is able to grow and with revenues growing proportionately more than their expenses (scalable business model).

Some authors even say that a startup is not a company, is an experiment or a hypothesis

Finally I like to emphasize that although the concept remind us very often of dot.com companies, there are startups in different industries.

  • Related issues:  prototipe, concept test, test the business model, high mortality.

Ballon Alex Briseño

  • Photo: KLAQ Ballon Fest 2012 by Alex Briseño. Flickr

If you liked this article or you think it can be useful for your contacts, I will appreciate if you share it on your social networks. Thanks!

Some years ago, I developed a metaphor to explain to entrepreneurs how important it is to plan the financial needs properly.

In my opinion, creating an innovative company is like having a tub full of water. The water is like the company’s money, the initial financing which makes the start-up activity possible.

At the moment of creation, it is as if the plug was taken away and the tub begins to drain. Continue Reading…

Pildora Financiera

Financing Pill

Welcome to my blog Passion for Startups!

I am starting this blog today with the hope that it will help many entrepeneurs.

My work with startups has created in me a kind of passion for new innovative companies. It is the moment, after 15 years working with startups, to organize what I have learnt about them and their entrepreneurs. I consider the early stage of an innovative company the most complex and challenging. Definitively, an exciting phase.

I have a great admiration and respect for entrepreneurs who take risks and create startups.

At a time of deep crisis in our country… Continue Reading…