Why VC Fails (Most) Hardware Companies.

Too Long; Didn't Read

In the last few weeks and months we’ve seen the death of a lot of hardware startups. We’re seeing the struggles of a few successful ones (Fitbit and GoPro) and the ones that are building hard hardware (I’m looking at you <a href="http://mashable.com/2017/02/15/magic-leap-stop-the-hype-show-the-product/" target="_blank">Magic Leap</a>) need to raise billions as a safety net even when they fall down what I’ll call the risk staircase. We’ve read about the woes of <a href="https://www.macrumors.com/2017/02/04/jawbone-wearables-pullout-clinical-health/" target="_blank">Jawbone</a>, <a href="https://www.google.com/url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=2&amp;cad=rja&amp;uact=8&amp;ved=0ahUKEwi7k7qG6vfRAhXLTSYKHe48AHUQFgglMAE&amp;url=http%3A%2F%2Fwww.businessinsider.com%2Flily-robotics-drone-criminal-investigation-2017-1&amp;usg=AFQjCNFxIUG3BA36lBlhOT6uwHytkbYwGQ&amp;sig2=7GVLNAop91tRSg5WjntqEA&amp;bvm=bv.146094739,d.eWE" target="_blank">Lily Drone</a>, <a href="http://nordic.businessinsider.com/vinaya-administration-indiegogo-backers-wont-get-products-refund-2017-1/" target="_blank">Vinaya</a> and <a href="https://techcrunch.com/2016/07/26/once-promising-ar-motorcycle-helmet-startup-skully-has-crashed-and-burned/" target="_blank">Skully</a>. All this makes the average founder wonder what is going on and whether they can get funding from VCs. In considering whether your hardware product should be funded by Venture Capitalists (VC), it makes sense to understand the risks, especially the risks as the VC sees them.