​The process from idea to competitive startup: 4 key elements from funding point of view

​Building a successful startup from an idea to successful launch and beyond is a mysterious process for many. There is so much information out there and it can be very difficult to obtain what is the right information for you.

First, it’s important to understand that depending on the type of company/business the process can be very different. Also we have intentionally left products, customers and other business related parts out of this process outline, to be able to focus on the other aspects of startup development.

When it’s risky to see if the idea will gain traction and momentum, the only logical thing to do from a risk funder’s point of view is to minimize all the other related risks involved, making sure that the idea will have the best possible chance of success.
​This usually requires ensuring the team behind it is great, the timing for the idea is right, competition is manageable, and the most important item, “protecting the idea,” would be possible.

However, the last one is becoming very difficult in today’s fast changing world and also less meaningful if the business can quickly gain critical mass (like a user base). It is also more and more difficult to patent and protect ideas and components in our “open source world.”

more about our framework

So based on these assumptions, we have outlined the process of building a startup that would have an optimum chance of success from the funding and growth point of view.
This process could be over simplified and there are many other factors as well. But it’s important for us to explain the main process:


​1) The first risk to avoid is to be too dependent on one entrepreneur where one would have such ownership that he or she alone could make all decisions. So the core structure / ownership will need to be built, so that also looking from a funders point of view, there is more than one committed entrepreneur. So at least a core team of two or three is advised (since a 50/50 split can be problematic as well). More than three depends on the business model, roles, ownership %, etc.

more about shareholder agreement

​​2) Other team members. The next step is getting various other contacts committed to support and offer expertise and funding when needed, without too much effort. These people can typically be ex-colleagues, business contacts and other close contacts that you have built. They are the type of contacts that you know and they know you. So real trust is based on those relationships

3) Next you will need an ecosystem: outside experts that are not in your personal and inner circle:  They are the ones bringing in the “outsiders viewpoint” and the contacts that would normally be out of your reach without a bigger effort. You must be able to convince enough of these types of people and get them involved with your start-up as well.

​4) When you have shown traction with external experts, and they are committed to help you by sharing their contacts and expertise and recommending you to others, your startup has reached a level where you are starting to look more appealing to funders. Of course, this is only looking at your startup structure and people involved with it. The value of the idea and the quality of your product must be competitive as well.


In Startup Commons, our focus is to scale entrepreneurship and innovation by empowering ecosystem development with global knowledge and tools for data-driven development. 
This because growth and success of the ecosystem is dependent on how well support services are designed and implemented.

more about ecosystem development