According to the Small Business Association, approximately 50% of small businesses fail within the first five years of operation. Many experts will tell you that a business fails most often because it runs out of capital or because the founders gave up too early. While the exact reason for failure will vary from venture to venture, there are several common mistakes that can lead to the ultimate downfall of an early startup.

 Throughout my career, I've mentored thousands of founders. Here are a few common deadly mistakes that I've noticed early-stage startups make, and what to do about them.

1. Target Audience Confusion

Social media marketing is a great way for companies to quickly grow their customer base. Unfortunately, if the founder does not understand who their target audience is, they can quickly blow through their entire budget with very little results. Identifying your target consumer and testing their likeliness to pay is a key step that no startup should skip over.

Do some research and identify who may be interested in purchasing your product or service. Testing these theories can often be as simple as asking individuals for their honest opinions, but I don't recommend asking family or friends — their opinions may be greatly influenced by your relationships with them. Once you feel like you understand who your target audience is, test this assumption with a limited budget and then slowly expand the reach. If your audience is responding well to the messaging, crank up the marketing budget; otherwise, adjust the copy and continue to optimize.

2. Over-Engineering Your MVP

Many founders overbuild their minimum viable product (MVP) infrastructure, which can inflate their burn rate without adding a ton of value. It is important for founders to create an infrastructure that allows the company to scale quickly and without friction; however, building an MVP that is equipped to handle 1 million-plus users on the first day is, for most startups, an unnecessary expense. In addition, maintaining your over-engineered architecture can be a fairly hefty bill.

Be realistic about the number of users your platform will need to support and the features that you really need to launch. Remember, the “M” in MVP stands for “minimum.” That means only the most impactful features need to be implemented for the MVP. Create a timeline with your development team that expands past the MVP. This will ensure you have a roadmap to reach key milestones but will allow the organization to receive feedback from the market and adjust properly.

3. Excessive Legal Spending

All too often I hear the same story: The company ran out of capital because they spent their entire budget on legal expenses. Legal is a key and important expense for every startup, but I would suggest speaking with your legal counsel to ensure you have proper protection without going overboard. There may be some legal work that can be deferred until after your company has gained some traction. Spending your entire budget on legal may leave you with a well-protected idea, but without the necessary capital to execute your business plan.

Speak with your legal counsel to see if there are boilerplate templates you can utilize to help reduce their billable hours. If intellectual property is an important part of your business model, consider filing a provisional patent instead. This may reduce your upfront cost and allow the company to spend its limited budget on more pressing items.

4. Raising Capital Too Early

Raising money is expensive — I know this may sound crazy, but it can be a full-time job. Raising money can be distracting and if you’re focused on the fundraising instead of putting your head down and concentrating on building the business, it can do more harm than good. Most investors want to see traction before opening their wallets and, let’s be honest, the only person who wants to invest in your unproven dream is probably your mother.

Bootstrap as long as possible. Investors are normally looking for certain key metrics before they are ready to open up their wallets. These metrics may vary based on your vertical and monetization strategy. The fundraising landscape has changed immensely over the last few years and the trend in venture capital is to focus on later-stage investments, so you need to find a way to stand out and de-risk their investment as much as possible.

It is easier than ever to do some initial testing. Your goal for every $1 you put into marketing should be to produce at least $3 in revenue. While some investors will come in at a much earlier stage, if you can demonstrate these metrics to a potential investor, it will improve your chances of raising capital exponentially.

5. Attitude 

Most experts will tell you that a business fails because of a lack of money; well, I believe that the real problem, in most instances, is a lack of passion and drive. It takes hustle and grit to build a business and a strong stomach that can weather a metaphorical punch in the gut. You must be lean and flexible, with the ability to shake off those failures and continue to persevere. In my experience, most companies shut down not because they are inherently failures, but because their founders gave up after the first few setbacks.

The ultimate success of a business is based only about 10% on how great the actual idea is. The other 90% is based on how well that idea is executed. It is very common for even seasoned entrepreneurs to make a ton of mistakes and fail the first time around, but a hiccup or two does not mean the business is unviable. Learn from those mistakes, listen to the market and have the confidence that you will eventually reach your business goals.