Tag archives: valley of death
By James Dacey
Many academics believe that they have an idea in them that could lead to a nifty new technology – and make them some cash in the process. But there is a world of difference between discussing an idea in the departmental common room and actually launching a new product to fit into an unexploited niche in the market. One of the biggest challenges that start-up companies face is known as the valley of death, which we have illustrated for you here with this quirky animation.
The voice you hear is that of Stan Reiss, who works for the international venture capitalist firm Matrix Partners. He explains how the valley of death is a metaphor for the financial challenges faced by a spin-off company in the early stages of its development. In this phase, the firm may have a prototype for a product but it might not have the income or the capital to comfortably survive and grow. Often, the company simply runs out of money and falls by the wayside. “There’s a lot of dead bones and skeletons at the end of that valley,” says Reiss.