Start-ups need to start

What a pity that one of the most exciting areas in business, start-up companies, is also one of the most neglected. Many of the 40 start-ups featured in this Upstarts issue struggled to get venture capital and some had to live on their credit cards to pay the bills. But they still recorded explosive revenue growth because of the sheer drive, determination, talent and passion of their founders. Some of these companies will go on to bigger things, some will struggle to sustain fast growth, and others will merge. A handful might turn out to be duds.

That is the nature of starting a fast-growth company. On some estimates as many as 60% of start-ups fail within the first six years, which might help explain the reluctance of venture capitalists to provide funds. But it is also likely that Australia's young venture-capital industry has a lower risk-tolerance than its peers overseas and that there is too much focus on how much money the providers of private equity make on their exit.

However, that is the market and start-up companies need to adjust their strategies to succeed. They need to think about sustainable growth over at least five years and plan for running a larger business. This is where many fall down.

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