SAN FRANCISCO, Oct. 26, 2015 /PRNewswire/ -- According to the
inaugural Capital One Growth Ventures Startup
Barometer survey, seven in ten (70.8 percent) startup
owners in the tech industry believe practical advice and mentorship
would be the most valuable resource to help take their companies to
the next level. The Startup Barometer is a semi-annual
survey of technology startup business owners that highlights key
questions and challenges facing many entrepreneurs today. The
survey, conducted in September 2015,
showed that entrepreneurs are most interested mentorship,
incubation and networking opportunities (20.5 percent), along with
marketing advice and counsel (20.5 percent).
The Startup Barometer examines how startup companies are
growing and what they need most from their strategic partners and
investors. In its initial study, the Capital One Growth Ventures
team also looked at how startups view the future of payment
technology. Capital One Growth Ventures has also launched a new
website – http://growthventures.capitalone.com/ – that provides
access to advice and insights from the Ventures team and the full
Barometer results.
"Our findings show that, in addition to financing, tech startups
need practical advice to help them grow and evolve their concepts,"
said Jaidev Shergill, Managing
Partner at Capital One Growth Ventures. "While tech startups are
initially driven by the product innovation itself – the new
platform, technology, or app they've dedicated their business to –
it doesn't take long for them to realize that 'making it' for the
long term requires more than just a great idea. That's where
finding the right strategic investor comes in. For us, investing
goes well beyond funding. We approach every new engagement with a
fintech company as an opportunity to explore the possibilities,
learn side by side, and unleash the potential of exciting new
digital innovations."
Most Tech Startups Planning for Full-Time Hires
Among the tech startup owners surveyed, nearly half (44.4
percent) report that they are in the Series B stage of funding,
meaning that they are in the midst of scaling the business,
building awareness and gaining traction with users. When asked
about hiring plans, the vast majority (85.4 percent) reported that
they plan to hire new talent in the next six months. Of those
startups planning to hire, 77.5 percent will hire full-time
employees, 48.8 percent will hire part-time employees, and roughly
one third will hire contractors and interns.
Working with Strategic Investors
As tech startup owners grow their businesses, they must
determine the type of relationship they will establish with
investors – whether it is an institutional investor who provides
only financial support or a strategic or corporate investor that
adds value to a company through a combination of funding and
additional resources such as market knowledge, experience, and
industry contacts. The Startup Barometer Survey found that
three in ten (29.1 percent) tech startups surveyed currently work
with corporate investors, while 37.1 percent partner with strategic
investors who are not from large corporations.
When asked about their expectations of investors, most tech
startup owners reported that they expect commercial relationships
(69.5 percent) and connections (61.6 percent) to a broader network
of industry and subject-matter experts. Beyond relationships, tech
startups also expect industry expertise (47.7 percent) and guidance
and mentorship (42.4 percent). In return for these resources, the
survey found that the most common benefits provided to strategic
investors include performance-based financial benefits (70
percent), board representation (49 percent) and decision-making
power, particularly in regards to acquisitions (47 percent).
"There is no single formula for how we engage with fintech
startups," said Shergill. "Before we invest in a company, we look
at the opportunity and say 'What could be?' We look at the
concept, the culture, the team and the value proposition of the
companies we're considering for our portfolio and focus our efforts
on finding companies where we truly believe our team – and Capital
One – can bring strategic value to the relationship."
What Tech Startups Need Most
The Startup Barometer Survey found that one in five (20.6
percent) tech startups surveyed does not yet have a fully defined
business plan or economic model for their company. When it comes to
time management, nearly half of tech startup owners (49 percent)
report that – in addition to developing their company's product or
service – the majority of their time is dedicated to day-to-day
business operations such as HR and accounting.
"We work closely with businesses to ensure that they are also
paying attention to day-to-day business operations and finding the
right talent to help them bring their products to market," said
Shergill. "Mastering some core execution fundamentals can mean the
difference between success and failure for a tech startup."
Tech Startups Prioritize Security in Payment
Technologies
The payment technology landscape is continually changing,
requiring entrepreneurs at every stage to make important decisions
about how their company will send and receive payments to and from
customers. While the majority (58.9 percent) of tech startups
believe traditional credit and debit cards will continue to
dominate, four in ten (41.1 percent) also believe other payment
devices, including Near Field Communication (33.1 percent) and Chip
technology (37.1 percent), will continue to be significant players
in the payments space.
The survey asked tech startups to weigh in on what they believe
is the most important feature of a payment provider and found the
following results:
- Security (44.4 percent)
- Ability to accept multiple forms of payment (25.8 percent)
- Brand and trust (15.9 percent)
- Connectivity to existing platforms (9.9 percent)
"The pace of innovation in the fintech space is incredibly
exciting, and it affects businesses of every industry and size,"
said Capital One Growth Ventures Venture Partner Lauren Connolley.
"The evolution of payment technologies and particularly the growing
focus on mobile technologies is a perfect example. The increasing
desire for convenience and 'seamlessness' among customers, along
with the growing need for privacy and data security creates a
really interesting friction that is spurring exciting new payment
technologies."
Survey Methodology
The findings reported in this release are from a survey
conducted by the opinion research firm, Survey Sampling
International (SSI), global provider of data solutions and
technology. SSI interviewed a sample of 151 decision-makers
(including CEOs, CIOs, COOs, owners and presidents) from for-profit
technology startups in the U.S. Technology startups are defined as
those that have been in business for 5 years or less and meet a set
of industry- and product-specific criteria. The survey was
conducted online and through computer assisted telephone
interviewing (CATI) from September 1,
2015 – September 28, 2015.
CATI sampling for this study was conducted using a sample of
businesses drawn from InfoUSA, while online surveying was conducted
using SSI's online sample.
About Capital One Growth Ventures:
The Capital One Growth Ventures team creates unique learning and
commercial opportunities for Capital One, bringing insights and new
capabilities to help drive and enrich the bank's digital
transformation through venture investments and acquisitions. Areas
of focus include big data technologies, payments & commerce,
and security & authentication. Capital One Growth Ventures'
goal is to help startups gain traction, evolve and test disruptive
new concepts and, at the same time, deliver breakthrough
experiences for Capital One customers. For more information, visit
http://growthventures.capitalone.com
Logo- http://photos.prnewswire.com/prnh/20141030/155590LOGO
Photo- http://photos.prnewswire.com/prnh/20151026/280317
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/tech-startups-seek-mentorship-and-counsel-as-they-grow-their-businesses-300165923.html
SOURCE Capital One Financial Corporation