Entrepreneurship drives innovation and when a business idea succeeds in garnering customers and sustainably delivers value, wealth-creation opportunities follow. However, entrepreneurship is fraught with risk and requires large personal commitments, plus special access to scarce resources. Most entrepreneurs understand that lack of funding is one of the biggest hurdles to overcome. Startups often avoid the funding challenge by tapping angel investors and other private funding.
Innovation hubs like Silicon Valley have long relied on a network of venture capitalists and tech entrepreneurs to bring ideas to market. Ideas get pitched, evaluated and funded by an exclusive investment community. While physical proximity to the Bay Area does not guarantee business success, it definitely helps! I remember a few years ago when I was attempting to start my own company with a colleague in Colorado. The tremendous fatigue that set in trying to drum up funding was ultimately what made us hang up our entrepreneur “boots”.
In the last three years, a movement has been underfoot to replicate the Silicon Valley ecosystem using digital platforms. Making funding available to entrepreneurs across the globe while enabling even small investors to partake in start-up funding has taken off through digital platforms like Kickstarter and Indiegogo. Over a 100 crowdfunding platforms now exist, and according to KickstartSuccess overall funds raised have exceeded the total venture funding ($34 Billion). Observing these trends has been fascinating. Interesting ideas from novel restaurant concepts to high-tech drones are all gaining investor interest.
Among the big advantages that entrepreneurs seek through crowdfunding are low initial costs of fundraising, rapid idea validation, greater market outreach and market testing. More important, investors come to the startup rather than the other way around. The crowdfunding model has proved its viability and its huge growth promises have been amplified in the press, but other hurdles exist.
Like with traditional venture funding, lack of proper marketing, inadequate product planning and the absence of industry partnerships can all contribute to the demise of some very good business ideas. New startups must understand that just signing up for a crowdfunding platform will not ensure success. Several steps between the spark of a business idea and its ultimate implementation need support for success. It is here that Indiegogo has created an ecosystem that not only funds the entrepreneur but also brings together many partners that will help the founders navigate product development, drive marketing programs and avail of supply chain solutions.
Indiegogo and others are recognizing the tremendous value that a company like Arrow can have by participating in this ecosystem. With revenues of over $23B, Arrow is a Fortune 119 company that, unlike the startup world, has been in business for over 80 years. We know a little bit about how to not only create, but sustain a company. Also, we can take new companies from sensor to sunset, helping them source their product materials, build their solution, take their product to market and then help them when their product reaches end of life. No other company on the planet can do this. In Arrow Intelligent Solutions, we help startups and even mature enterprises as they look to take new products and solutions to market by assisting them design, manufacture and deliver their product globally.
I am excited about Arrow’s partnership with Indiegogo and Arrow Intelligent System’s role in driving the next generation innovation.
