The three necessary components to start a startup are an idea, investment and time. You will need to be working on all fronts simultaneously, find the right contacts and the support systems necessary to secure funding or be able to bootstrap your startup yourself. (bootstrapping = using your own savings or those of close friends and family and not relying on outside investment)

There are myriad reasons why startups fail and most of them can be prevented. The reason is simply that not all startups develop a product the market needs or wants to reward financially. We also see the same “traditional” problems affecting other businesses such as lack of money, ineffective team management, bad marketing, pricing or better competitors.

When it comes to what you need to know, basic business principles apply. From a business-centric viewpoint you will need to know your target audience, conduct market research, find investors, register and pick a location (you can also choose to be location independent), and develop a product that stands out from the market.

Startups that manage to become successful are prepared, have a sensible business model and can position themselves within a market that offers long term exponential growth.

This all depends on your business model and how fast you want to scale. The initial investment will go towards your product development, the members of the team needed to execute the idea and the cost of the technology. As you grow, you will need to account for location costs, more research, and promotion. The idea research, business plan and initial product development will need to be underway before you seek investors.

There are 7 major startup funding stages that every entrepreneur or startup developer needs to be aware of. This presents a linear progression for successful startups but not every startup will manage to proceed to the next stage.

Pre-see funding – funding from friends and family

Seed funding – angel investors, incubators and early-stage funding VC’s

Series A funding – VC’s, accelerators

Series B funding – VC’s (late-stage)

Series C funding – VC’s, private equity firms,

Series D funding (optional if needed)

IPO – Stock Market Launch – open to the public