![]() | |
![]() | |
![]() |
Investing Information |
|
![]() |
Raising Capital in Today's "New Economy"
We've helped a number of clients develop business plans and raise capital from "angel" investors, corporate entities and venture capitalists during the last 6-8 years. It's always a daunting process that can be full of pitfalls and require a tremendous amount of work - but it can be done! Here is some perspective gleaned from years of experience. The most important rule for raising capital to consider is: it's never easy to raise capital when you need to! Meaning, investors are inherently risk aversive, can be very picky (a real understatement!) and they are looking for the best deal with the greatest upside and minimal risk. Rule number two - don't raise capital! Self fund your company (called bootstrapping in entrepreneur-speak) by finding customers that will purchase your products and services. This enables you to involve your most important business asset in your business from day one - customers! Rule number three - use the "FAF" or "VMC" methods. Raise seed (early stage) money from your friends and family and/or if you are really committed, pull some cash from a Visa or MasterCard. These methods can and do work for many entrepreneurs - be aware it can be very painful on the back end if your company does not make it! Angel investors can add so much to your company - they can bring "intelligent capital" to the business. Not only do they invest capital but will very often take an interest in helping you grow the company by taking a Board of Directors seat and/or temporarily assuming a senior management role. In my experience finding and recruiting a blue chip management team with advanced degrees and a strong corporate pedigree can sometimes kill a startup as quickly as no cash or revenue - yes, they look great in your business plan and venture capitalists love a "strong team." But, you need "fly by the seat of their pants" manager/leaders who don't need to grind five sets of scenarios (analysis paralysis) before they can take action - hire entrepreneurial types who've excelled in small companies. Dealing with venture capitalists can be a significant challenge that is fraught with risk and no upside! Remember, they are highly skilled at the entire process, in most cases they've done it hundreds of times before. So, your on their turf when you step into this arena and you better do your homework properly (market size, revenue projections, cost of sales, marketing plan) and/or consult with a consultant, attorney or "angel investor" who has been through the process before to give you guidance. Round two in dealing with venture capitalists (assuming you are one of the 1% that submitted a business plan and/or were referred to them by another "VC approved" entity) can also be fraught with risk - know how to value your company (equity for capital), look at comparable deals in the marketplace and be prepared to negotiate hard and to give up more now than in the last 2-4 years. Round three in dealing with venture capitalists or corporate investors. Don't (never!) be so desperate for capital that you agree to turn over the reins of the company if you don't meet specific performance milestones based on a first or second round of funding. There are too many variables in the marketplace for you too control and you're taking too much risk for not enough upside. If this is the only way you can raise money from this venture firm or corporate investor then walk away, in the end you will be better off. Here are some "cliff notes" on how to write a business plan - there is no set formula other than covering the basics about your company; i.e. technology, market analysis, marketing/business development, competitive analysis, management team and a five year set of (detailed by month from startup to year three) financials. The Executive Summary (first 3-5 pages) is the most important, as it is a summary of the entire plan and most investors read this carefully and scan the rest of the business plan. Don't get caught in the trap of endless rewrites based on investor feedback - put your plan through one or two reviews by your BOD members and or seasoned execs that will give you honest feedback. Once the plan has been reviewed and approved then go to market with this iteration and stick to it - investors should be investing in you ultimately, not an artificial business plan that more often than not is out of date by the time you get to market. Think about how you are going to market your company as you would any other product or service, blending traditional (fax, direct mail) with interactive processes (web site postings, e-mail, etc.). It's a numbers game, you have to aggressively market your company and be prepared to see a return of only 1-3% versus your output - 1K in direct or opt-in email may only lead to 10-20 casual inquiries, generating 5-7 serious conversations, resulting in 1-3 term sheets (what we will invest for "x" equity) discussions. Finally, the last and most important rule of all is be tenacious, there is no substitute for absolute commitment to growing your company by raising capital or bootstrapping it! Your vision, guts and passion will very often carry the day when/where others may give up!! About The Author Lee Traupel has 20 plus years of business development and marketing experience - he is the founder of Intelective Communications, Inc., http://www.intelective.com, a results-driven marketing services company providing proprietary services to clients encompassing startups to public companies. Lee@intelective.com
MORE RESOURCES: Biden Issues First Veto to Protect Socially Conscious Investing The New York Times Sustainable investors don't need 'green bleaching' Financial Times Cliff Asness: The 'Two Newspaper' Investing Strategy The Acquirer's Multiple Missouri House endorses crackdown on 'woke' investing St. Louis Post-Dispatch Warren Buffett Loves This Investing Strategy. Should You Try It? The Motley Fool Investing in CCP Games Andreessen Horowitz Gold Stocks May Shine Amid Banking Storm, Fed Conundrum Investing.com Dow futures lift, Fed hikes 0.25% By Investing.com Investing.com What's the Best Silver ETF to Buy? 7 Contenders | Investing | U.S. ... U.S News & World Report Money Stocks Drop After Fed Raises Rates The New York Times Investing in Acadian Timber (TSE:ADN) three years ago would have delivered you a 52% gain Yahoo Finance Venture groups boost investments in Pittsburgh startups by 21% in ... Pittsburgh Post-Gazette Introducing Mozilla.ai: Investing in trustworthy AI Mozilla & Firefox The Macro Investing Outlook - Gaining Perspective - Podcasts Advisor Perspectives 5 Ways to Prepare Your Portfolio for Black Swan Events U.S News & World Report Money Statement – Supporting and investing in our health workers is a win ... World Health Organization Think the Bear Market Is Over? Here's How to Invest $5,000 The Motley Fool Investing in Capital | Budget 2023-24 Government of Saskatchewan Opportunity Zone Investing Made Simple With OZ Pitch Day OpportunityDb Investing in Wingspan Andreessen Horowitz $10,000 Invested In These Growth Stocks Could Make You a ... The Motley Fool Majority News Release | Majority News Releases | News | United ... United States Senate Committee on Appropriations Why Investing at the Last Moment Can Hurt Your Returns The New York Times Marks & Spencer gains on triple upgrade By Investing.com Investing.com Admitting investing mistakes directly leads to making better decisions and, thus, making more money Economic Times Women aren't investing at the same rate as men. Here's why it matters—and how the gap can be closed CNBC Investing in Believer Andreessen Horowitz 3 Retirement Investing Moves to Help Get You Back on Track The Motley Fool KB Home shares gain 3% on Q1 beat By Investing.com Investing.com PTC Elem. student 6th in nation in investing competition The Citizen.com Statement by NSC Spokesperson Adrienne Watson on the ... The White House Phase 2 of the Fed Follies Begins Investing.com AUD/USD: Another Trip To the Bottom Investing.com Investing for Teens: What They Should Know Investopedia 7 ETFs to Bet on a Banking Sector Rebound U.S News & World Report Money Local agency investing millions to improve trails WYSO Public Radio Investing in Jumbo Interactive (ASX:JIN) five years ago would have delivered you a 263% gain Yahoo Finance PayPal CEO seeing improved eComm market By Investing.com Investing.com Joe Biden's Push to Counter China Steers EV Investments to Canada The Wall Street Journal Investing in Replicate Andreessen Horowitz Hollywood Courts Wall Street’s ESG Investors Mainly With Film and TV Messages, Not Carbon Offsets Hollywood Reporter What is ESG investing and why do some hate it so much? The Associated Press Investing in Svix Andreessen Horowitz In just 2 years, Tanzania has grown the value of its investments to $8.6 billion Business Insider Africa Yokota AB AFWERX team seeks to invest, innovate, inform Air Force Link Banking Crisis Investing Strategy: What Stocks to Buy, Goldman Sachs Business Insider Homes Have Gotten Cheaper by Running in Place Investing.com What's The Surest Route to Investing Excellence? Morningstar Inflation tops list of institutional investors' worries – Nuveen Pensions & Investments Should You Be Saving or Investing in 2023? GOBankingRates How Environmentally Conscious Investing Became a Target of Conservatives The New York Times The Fundamentals of Value Investing The Motley Fool Battery component maker investing $1.5B in Terre Haute campus ... Inside INdiana Business Uptake Barriers Will Deter Future Competitors From Investing in ... The Center for Biosimilars |
![]() |
![]() |
![]() |
RELATED ARTICLES
My Way Or The Highway: Give Your Financial Professionals A Good Talking To! All this talk about Investing is encouraging lately. Over the last few years, more people have become interested in the duty to invest there money, then ever before. How to Choose the Right Share Class You'll want to opt for the no-load or institutional share class instead. If you're a no-load investor who is determined to buy a fund that's primarily broker-sold, go through a supermarket and opt for the D shares. Basic Options Terms Options are good investing and speculative instruments. But options terminology may confuse even experienced investors. Justify Social Security ... Dont Save for Retirement It is a common question when investors review their retirement plan-should we include social security benefits into our retirement income projections?It seems the closer an investor is to retirement, the more likely he/she will include social security benefits into the analysis. Younger investors, however, may feel compelled to omit such benefits. Use this Simple Trick its to Buy $100 Bills Direct from your Bank for only $97 Most People just don't understand the power of using their home as a Wealth Creation Tool. How many people do you know who have lived in the same house for 10, 15 or more years and have virtually no mortgage, You know the Type 'House Rich Cash Poor'. Wit and Wisdom on Money, Wall Street and Success - Part #1 I love to collect quotes as they concisely promote a philosophy which is readily understandable.In my 25+ years of investing I have collected hundreds of quotes related to Wisdom, Wall Street and Success. Caveat Emptor: You May Owe Taxes Despite 401(K) Losses! One among many ways you lose money in non-indexed mutual funds is the tax trap. You may have to pay taxes even when your mutual fund loses money! To many people this is painfully unexpected. Discipline in Trading and Investing The one thing I can think of that most affects both trading and investing has to be self-discipline.Being disciplined is fully 50% of the job of trading or of investing. Invisible Mutual Fund Fees Erode Your Returns! Many investors think that investing in mutual funds is free. What nonsense! Funds collect more than $50 billion a year in fees from investors. Retire Dollar Smart Jim Miller is a registered investment advisor. This means that he is not beholden to a particular brokerage or financial institution. Annuity Help Many people today are looking for annuity help. The biggest challenge seems to be that most of the help is biased. Dumb Money Many people have, at one time or another, taken some of their hard-earned funds, and decided to put them in the stock market. These well-meaning individuals either acted on a tip they saw on CNBC, or actually believed one of those crazy faxes/emails that said XBXB @ $0. When Its Too Late to Save for Retirement You are 55 years old (or somewhere aroundthere) and your company is going to force you toretire at 65. You have $35,000 saved in your401K and that's all. Investing Offshore for Retirement As an expatriate you are in a privileged savings and investing position. Make the most of the options available to you while you can, consider investing offshore for your retirement. Time is Money and We Are Running Out of Both! One of the fundamental principles of finance is the concept that $1 today is more valuable than $1 a year from now.Making adjustments for inflation, the dollar will buy less goods and services next year. Delist My Corporation Please It use to be said that once a company was de-listed from the NASDAQ it was the kiss of death, not so any more. With Sarbanes Oxley and all the insane reporting requirements it might save your company from incessant lawsuits from investors and the government regulators who are out to destroy free enterprise. Angels Investors and Their Networks What is an Angel Investor?An Angel is usually a private person who invests in small businesses. The Angel is generally a successful businessperson or entrepreneur who looks to invest in a business that has potential for growing their investment in the future. Trading Tips No 3: Online Trading and Investing: Buy, Hold, and Hope So you have learned how to trade the markets by mastering a few trading tools like Moving Averages, Channels, Stochastics, MACD, or RSI - that is a great accomplishment achieved by only a few. However, having the tools and rules to trade markets successfully, year in and year out, is only half of the challenge. The Biggest Oil Opportunity in the World - And How You Can Profit From It Where is the second biggest deposit of oil reserves in the world?In the oil sands region of Alberta, Canada. Oil sands are a thick, viscid mixture of bitumen, sand, clay, and water. Oil and Gasoline Price Uncertainties The Light Crude Continuous Contract hit an all-time high at $70.85 a barrel, while Unleaded Gasoline Futures spiked 50% or $1 a gallon on Tuesday. ![]() |
home | site map |
© 2006 |