Surviving the Valley of Death: Early-Stage Startup Strategies

early stage startup strategies

The valley of death is everything its name suggests especially when it comes to the business of startups. It is a dangerous deciding period in which an early-stage startup can either wither or flourish. Unfortunately, in most cases, it is the latter.

So, how do the startups that eventually succeed make it happen? Is there a secret business model? What do you need to do to be part of the winning percentage? All you need are the right strategies and excellent execution.

In this article, we’ll give you seven of these strategies that will help you survive the death valley curve as a startup. Are you ready to get out of this alive? Let’s begin!

The Valley of Death

The valley of death is not just a catchy phrase but is a well-acknowledged and even defined stage in the startup world. It is the period between when a group of people come up with a great idea for a product and the time they actually implement the business model and start generating revenue.

The “valley of death” signifies how easy it is for startups to fail at this stage. In fact, according to a Gompers and Lerner study, ninety percent of new entrepreneurial businesses that don’t attract venture capital fail within three years. And there are a lot of businesses that don’t attract venture capital; it is exactly what makes startup companies so vulnerable at this stage.

While developing a product, you will spend your initial capital on surveys, renting office space, paying employees, and other costs before coming up with a working product. Yet, you have not started generating revenue.

So, of course, you will soon find that your pocket is depleted and you need funding to cover all the negative cash flow. On the graph of a company’s cash flow, the valley of death is the part where it is at its lowest point. If you make it through the death valley curve successfully, there is a higher chance that your startup company will survive in the market as well.

So, how can you survive the valley of death and make it into the market unscathed? 

Seven Strategies to Survive the Valley of Death As A Startup 

Here are seven strategies to help you make it through your most vulnerable moment as a startup company:

Plan To Succeed

Of course, no one plans to fail but if you want to make it into the market, you’ll need to do more than just that. You need to be able to determine how much money you will spend before you start to generate revenue. Cut costs as much as you can; if you can find a free office space, even better. In addition, you must make allowances in the case of unforeseen circumstances. How will you cover costs in the case things don’t go according to plan? 

Have a plan B, and if possible, a plan C. These plans may involve you and your day job or funding from your friends and family. These are the most common sources of extra funding for startup companies. So, if immediately you have an idea for a product, you start thinking of quitting your 9-5 job, you should reconsider it. However, even with your loved ones, you need to have a solid business model. If you can’t even successfully convince your family, how would you convince outsiders? 

Moreover, if you already have your money in it, it will even propel outside investors to come in and take the risk as well. This brings us to the next point.

Get Out There Fast

The longer you spend in the valley of death, the harder it is to get out and the hole will only get deeper. The best way to prevent rotting in this hole is to speed up the implementation of your business model as much as you can. The faster it is, the less money you’ll spend and the easier it will be for you to get out of the death valley. 

This is no excuse to rush important processes and present half-baked products, it’s only a pointer to how essential speed is.

Find Your Angel Investors

If you play your cards right, venture capitalists may be your guardian angels. The first thing you need is a minimum viable product to test the market and get feedback. This way, you can provide your potential investors with a solid business model and proof of a willing target market. 

Show them the numbers, present a strong team of skilled workers, and make them believe in your product and its potential, and you’d be surprised at just how much they will be willing to shell out.

An advantage to finding angel investors is that they can provide you with more than money. These people are usually well-experienced and can guide you to make the best decisions, they may even connect you with other big names from which you can benefit.

Fight For the Money

We do not mean to fight physically but through competitions and business grants. Startup competitions are opportunities for you to showcase your product or service to several investors at once without even actively seeking them out. So, naturally, you have to bring your A-game.

There are several startups, and not all will be able to get investments at a competition or a grant. Several government Initiatives have set up such programs and several people are vying for the rewards.

So, ensure you register early and show up with a foolproof business model. The best part about this activity is that even if you didn’t win the competition, you would have successfully placed yourself out there and even sparked the attention of your target audience. You exponentially increase your chances of getting offers.

Call For Crowdfunding

What if after getting funds from your friends and family, you still find yourself in a financial hole? Or maybe you did not win that competition and investors are still yet to seek you out. What’s the next step? Well, crowdfunding is one option.

All you have to do is set up a crowdfunding campaign and call for people to put some faith, and money, in your product. This is where you must make sure that your product is what you say it is. Imagine if after setting up a campaign, no one is willing to invest, it only shows that you have either not developed what they need or you’re in the wrong target market. Either way, it’s a good way to test the reception of your product or service by the public. If you deliver on your promises, crowdfunding may be your way out of the death valley curve.

Joint Venture

A joint venture is a commonly overlooked way of pulling your company out of the depths of financial ruin. If you find a company whose goals or products are aligned with yours, or which you can benefit from each other, make a proposal to them. Let them see ways in which your company can boost theirs and vice versa. If you succeed, it will be a symbiotic relationship where neither company has anything to lose 

If the company is already well established, it can provide you with funding in exchange for repayment when you eventually start getting your revenue. You can promote your brands together especially if your target audience intersects, and build a strong customer base. You will share the costs of commercialization and even in the best-case scenario, forge a lifelong partnership and bring a new concept to your audience.

Get A Loan

This option is coming last on the list for a good reason; it is for the worst-case scenario. If all else fails but your faith in your product stays, then you might as well get a loan. You must be confident enough of the potential of your business to put your assets up as collateral for a loan.

Banks are more likely to approve a loan if you are cash flow positive. So, this option is best if you have already started generating some money and it’s just not sufficient revenue to keep you afloat.


The valley of death is a dangerous place for a startup company to be but it is impossible to avoid. The best you can do is navigate it with all the right strategies under your belt. That is what we have equipped you within this article. We have given you plans A and B, right down to plan G. If one fails, another is bound to work.

So, keep at it, keep the faith, and fight till you climb out of that deep death valley curve. Follow these steps and your company will be part of the ones that survive this vulnerable stage. Good luck!

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