How to Blow Up a Start Up — The Biggest Financing Pitfall for Entrepreneurs
Perhaps the greatest challenge an entrepreneur faces is funding an operation once a business is up and running. I focus my analytical efforts on the discovery space, predominantly the junior mining sector – an entrepreneurial space if there ever was one (You can subscribe to our free weekly newsletter here: www.discoveryinvesting.com). We’re big believers in the idea that a high quality discovery leads to long-term wealth creation – both for the entrepreneur and the downstream investor alike.
The overwhelming majority of these early-stage public companies generate no cash flow, revenue, or earnings. They exist solely at the whim of friends and family and the financial markets willingness to fund a potential “world class” discovery (a high grade gold deposit, for example). This style is akin to playing the lottery where all you need is “a dollar and a dream.” Though the failure rate of most of these entrepreneurial efforts is high, the success stories can be legendary.
The graveyard of junior mining companies is littered with stories of amazing mineral discoveries that never got the financing mix right. Sustainability, the company’s ability to remain financed to the point where it can begin production, is crucial. Savvy investors in this economy, not wowed by the next big thing, know that sustainability is the most important factor to evaluate when deciding where
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