johnmeyer
Well-Known Member
That's really harsh, and seems to be based on a very poor understanding of how startups work, including how they worked prior to "crowd funding" sites like Kickstarter.
Various statistics suggest that about 2/3 of Kickstarter ventures fail. I founded or ran three startups and then spent the decade of the 90s as a "startup consultant." The success rate back them was pretty much the same as what is quoted for Kickstarter.
As for taking out a loan or accumulating all the capital they need prior to starting or growing the business, that indicates a total lack of understanding of how a startup works. Unless you happen to already have a few million in the bank, no commercial bank, and no rich person is going to give you a loan, even if you pledge your house and everything else you own as collateral. Most of these entrepreneurs don't even have a home yet, and therefore have no collateral.
As for using your own money, most people don't have enough money to hire even 2-3 employees at $100,000+ per year, which is what startup talent costs (at a minimum). How many people have half a million in the bank that they can put at risk and, for those that do, how long did it take them to accumulate that? If you can save 20%/year from a $120,000 salary ($24,000), it will take almost twenty years to accumulate that much.
I spent my ten years helping Internet startups get money. Virtually none of them were candidates for venture funding because the VCs expect a 70% annualized rate of return and expect a liquidity event (IPO or acquisition) within five years. Not many businesses can produce that. Instead, prior to crowd funding, most of these 2-5 person startups I dealt with were able to get money through doing contract work on the side where, if they played their cards right, they could get a large company to pay for developing something for that company, while retaining the rights to the underlying technology to be used for the company's main project. Retaining the rights was the tricky part of the negotiation, but it usually worked because the big company wanted the technology really quickly which a startup can do whereas the big company cannot.
There are dozens of other ways, prior to Kickstarter, to raise money, but doing it from your own pocket, or taking out a loan simply are not viable solutions.
So, it is extremely wrong to characterize these people as lazy slobs. That's simply not what is happening.
