Sergey Kartashov gives an insight to why most startups die in the first year

IT asset management is not an easy work as to be profitable, investor’s portfolio has to have numerous different companies. An investor not only has to analyze the activities and profitability of existing companies, he/she has to be on the lookout for new trends and analyze information. The investor has to do all these tasks to expand, maintain, and increase profitability. CEO of Generation Partners, Sergey Kartashov tells us why investors pick and leave startups.

IT asset management is the main focus of Generation Partners. Their main office is situated in Cyprus. Sergey Kartashov says Cyprus is the ideal location for working with Eastern and Western Europe clients. Sergey Kartashov says the island is favorable for the IT community and for relocating the startups.

Sergey Kartashov, CEO of Generation Partners, says it is their job to monitor the market and choose startups to invest in. Their job include analyzing everything from idea, business plan, and management level as well as foreseeing the possible risks. He says that seldom startups are worthy enough to invest in.

According to Sergey Kartashov, investors can lose interest at the very first glance at the startup. He says the experts have enough knowledge and experience to know which startup has potential for success. Sergey Kartashov tells that during the very first year, around 90% startups die, and of the remaining 10%, half of them fail following five years. Sergey Kartashov says there are many reasons a startup fail including lack of funding and internal conflicts.However, an expert can calculate the risks involved by studying the startup’s project in detail.

Sergey Kartashov has outlined three common mistakes the startups do:

  • Lack of project development strategy. People creating the startups lack creative thinking. They perceive an idea and shape it into a product. In today’s world, it is easy for even the newest, most unique and innovative development to get lost in flow of information. For a startup to become successful, it is not simply enough to make a product. A development strategy is crucial for a startup’s success.
  • Lack of business model. It is essential for a startup to have a business model. An investor needs to see a business plan to invest in the startup. An investor will lose interest in the startup if they don’t present a business plan, and without sufficient funds, startups will usually die.
  • Weak management. A weak management leads to startup’s failure. The strength of management is usually revealed during the scaling phase. A startup is like a human body with working organs. If any of the organs fail, the whole body suffers.And it may refer to developers’ work, marketing process, lawyers’ part of work, or communication with users.

Sergey Kartashov says he can enlist other points as well as why startups fail. Internal conflicts including problems with founders lacking business experience is a main reason for startup’s downfall. Sergey Kartashov says that during the initial analysis of the product, the listed points can be spotted.

Sergey Kartashov says that if a startup has an unfinished strategy, but they have desire to improve it, the investors will go along with it. They will help the startups find the specialists and invite people from other projects. However, the investors will stray away if the key points are completely ignored by the startups.