How To Raise Seed Money Right (And Wrong)

YoungUpstarts

I need to admit to a personal bias right up front: I am not the biggest fan of borrowing seed money. In fact, when I founded Fit Body Boot Camp , I never took a single of cent of seed money, mainly because I wanted to maintain total control of my vision.

Don’t Forget Grants If You Need Early Seed Money

Startup Professionals Musings

In the US, many entrepreneurs see grants as “free money,” since they are not loans and don’t have to be repaid. But before you conclude that your funding problems are solved with grants, you should consider the direct and indirect costs of grant funding: Grant applications are bureaucratic.

Trending Sources

Don’t Forget Grants If You Need Early Seed Money

Gust

In the US, many entrepreneurs see grants as “free money,” since they are not loans and don’t have to be repaid. But before you conclude that your funding problems are solved with grants, you should consider the direct and indirect costs of grant funding: Grant applications are bureaucratic. If you meet all the requirements, complete all the paperwork, and submit your grant application today, it will likely be six to nine months before you see any money.

What every entrepreneur should know about financing right now

Version One Ventures

The ability to raise money no longer determines one’s fate. With lowered costs to build and run websites, acquire and retain users, virtually anybody can pick up coding and start a tech company. More money is flowing in from a new crop of angels, newly wealthy from a number of tech IPOs. And, we should expect angel activity to drop as new angels discover that returns from their seed investments aren’t so easy to come by.

How to Decrease the Odds That Your Startup Fails

Both Sides of the Table

We also know that even though many of us who are experienced in startup successes & failures look at businesses and say, “That will never work” (as many people said about Uber) or “You can’t make any money in that business” (as many said about WhatsApp or Dropbox) and of course some entrepreneurs pull off extraordinary things we never thought possible. But in the end these all have a cost – it’s just hidden.

Should Startups Focus on Profitability or Not?

Both Sides of the Table

If you hire 6 sales reps in January at $120,000 / year salary then you’ve taken on an extra $60,000 per month in costs yet these sales people might not close new business for 4-6 months. ” If you’re not profitable you’re purely a cost center to them.

Seed and Later Investments for Startups are Booming

Startup Professionals Musings

The number of startups getting seed funding in 2012 jumped by 65% over the previous year to a total of 1749, according to a recent report by CB Insights. Seed investments” are early stage financings (typically less than $1.5 Seeded companies will take longer to raise a next round.

2009 VC Fundraising Strategy

Startup Economy

Investor shift focus on existing portfolio companies by allocating more follow-on reserve; thus, less money for new companies reduce risks in early/seed stage capital allocation set a higher bar in funneling investment opportunities advertisement-based business model is no longer a viable option for most companies in internet/mobile holds more negoting leverage on valuation. Tags: Investment Seed money business model venture capital early stage

Booming Companies That Should Inspire Entrepreneurs

Blogtrepreneur | Entrepreneur Blog

Uber Uber started out as a small San Francisco business that managed to generate $200,000 in seed money in 2009. Every huge company started out as an entrepreneur with an idea and the willingness to work hard to reach his or her dream.

Mile-High disruption: Why Denver should be on your tech radar next year

The Next Web

Denver residents enjoy a significantly lower cost of living; housing costs are half that of the SF Bay Area while utilities, food, transportation and healthcare are 15 to 25 percent less.

10 Reasons Why Capital Shouldn't Make Or Break Your Startup

Startup Professionals Musings

Having no money can help you plan. With a bank account full of someone else's money, it's hard not to feel flush with cash and have a false sense of security. But when your only capital is your hard-earned seed money, every penny that goes out will be scrutinized painfully.

How To Get Started in Affiliate Marketing With No Money

TylerCruz.com: An Internet Entrepreneur's Journey

A number of months ago, a reader requested that I write a post on how people can get started in affiliate marketing with little to no money, including not having a credit card. While some people may say that you can technically start without any money such as relying on search engines, using free traffic methods such as Craigslist and forum signatures, etc., In fact, the majority of super successful affiliates who are making millions still lose money when they first start campaigns.

No Plan Survives First Contact With Customers – Business Plans versus Business Models

Steve Blank

We thought we’d take our plan and go raise seed money. We can’t raise money knowing our plan is wrong.”. This includes how the product gets distributed to your customers and how money flows back into your company. No campaign plan survives first contact with the enemy.

7 Things You Should Know About Angel Investors

Inc Startups

You have more opportunities than ever before to raise seed financing. In fact, they''re shifting the financing landscape-- making it harder for a seed-funded firm to raise a Series A round of VC money. Here''s what you need to understand first.

3 Reasons Not to Crowdfund

Inc Startups

It is either a) the best thing to happen to start-ups since Red Bull; or b) while sometimes useful, it’s no serious substitute for other sources of money, including family & friends. Yes, crowdfunding is cool. It''s democratic. It''s disruptive.

SEC 25

Startup Business Investments Around The World

YoungUpstarts

Over time, as you scale your operations, you may need to source additional funding from venture capitalists to mitigate high production costs or limited revenue. They aim to help small businesses take off the ground, and at the same time, make money from loan profits.

Warby Parker of Shoes? Meet Beckett Simonon

Inc Startups

We understood how much it cost to make a shoe," says Andrés Niño, the co-founder and CEO of Beckett Simonon. Niño and his co-founder, Nicholas Hurtado, both 26, had some experience in manufacturing stylish items at low cost.

5 Reasons To Use Your Personal Credit Card For Business Expenses

YoungUpstarts

Unless you have a healthy bank account or investors to fall back on you’re likely going to use your personal money to finance portions of your business expenses at some point. This could come in very handy when you need seed money or need to make several large purchases at once.

Why the Series A Crunch Might Be a Good Thing

Inc Startups

In 2012, Rust and co-founder Garrett Johnson raised $2 million in seed funding in two weeks. Share of seed-funded companies that won''t be able to get follow-on funding: 61%Source: CB Insights That''s the story, anyway, and it has the start-up community vibrating with angst and debate.

Why LA Is the New, Hot Place to Launch

Inc Startups

“There are capital efficiencies in the market that have brought down the cost of creating a start-up,” he says. Selected start-ups will get four months of office space, training, mentoring and support, as well as up to $50,000 in seed capital.

Where to Get Feedback on Your Business Pitch

Up and Running

They ended up with a nice pitch, and approximately $300K in seed money.”. He warns that although quality and prize money vary from competition to competition, they can be a great way to practice pitching in a setting designed for getting feedback.

The best advice startups will never follow

Berkonomics

Let me tell you a few short hair-raising stories of entrepreneurs who have raised money and regretted it later. There’s a common expectation among entrepreneurs that seed money from family is great – letting close relatives in at the ground floor. Starting up Raising money

Life As A Startup Consultant

Seed Stage Capital

and despite putting in the hard work, the vast majority of startups will still fail, for any variety of reasons (market shifts, funding environment changes, CAC costs too much, etc.). If you want to work with startups, the money has to be secondary. Subscribe to Seed Stage Capital.

Getting a Micro Loan Just Got Easier

Inc Startups

According to the New York Daily News , the reserve would cost the federal government $30 million a year for the next five years—and allow about 1,000 lenders to make approximately $125 million in loans to small businesses.

Can This Start-up Shake up the Art World?

Inc Startups

The company rents great art to customers, with an ever updated selection of new works—at a fraction of the cost to purchase. Consumers can already rent dresses, cars, and DVDs by the day. Why not fine art? Everyone wants nice things.

Let’s Tax the Boy Scouts

Gregg Fraley, Author of Jack's Notebook

One must have at least seed money, or more, to get a start-up going. Essentially credit unions are a way for people, their members, to band together, pool resources, and provide members low cost loans and other small scale financial services.

The Series A crunch is hitting now. Have we even noticed?

pandodaily.com

We know this: As many as a thousand companies who’ve received seed rounds won’t be around in a year — maybe six months. The number of seed and angel investors has exploded in recent years, buoyed up by a number of factors. Pando Daily. PandoMonthly. Video. PandoDigest.

D-Wave's Dream Machine

Inc Startups

Farris had thrown Rose a few thousand dollars in seed money, and they raised half a million (Canadian) from local angels. All of that seeded what is now the biggest IP portfolio in the world in quantum computing. Then D-Wave ran out of money.

Why It's Critical to Think Big

Growthink Blog

You don't need a million dollar advertising budget, but you should have some seed money to get your business and its marketing campaign off the ground. In fact, when planning a project or borrowing money, come up with a figure of how much you'll need and then double it!

Disruption Comes (Finally!) to Commercial Real Estate

Inc Startups

What Freedman does not want to get out of these meetings is the one thing most people seem to think he wants: money. That's because he believes that you should take as little money as possible early on, to protect the value of your shares down the road, when you really need the cash.

The Legal Side of Entrepreneurship

YoungUpstarts

This article highlights their advice on issues ranging from financing to patent trolls: While startups may believe lawyers are too costly, working with one early on avoids potentially serious problems later. ” The Cost of Financing.

VCs in seed clothing: Chris Dixon, Mark Suster, and Naval Ravikant interviewed

Venture Hacks

The topic was VC signaling in seed rounds — and how these signals help or hurt your ability to raise money in the next round. SlideShare: VC signaling in seed rounds. Chris Dixon: The problem with taking seed money from big VCs. VC signaling in seed rounds.

How to Fund a Startup

www.paulgraham.com

A typical startup goes throughseveral rounds of funding, and at each round you want to take justenough money to reach the speed where you can shift into the nextgear. At Viaweb we got our first $10,000 ofseed money from our friend Julian, but he was sufficiently richthat its hard to say whether he should be classified as a friendor angel. The advantage of raising money from friends and family is thattheyre easy to find. But as well as money, theres power.

The Future of Web Startups

www.paulgraham.com

Plus in a startup you could make much more money. This is a problem for founders, because it makes raising money take longer and cost more in legal fees. Back when it cost a lot to start a startup, you had to convince investors to let you do it. I know because I see behind the scenes what an enormous amount of work it takes to raise money, and the amount of selling required in an industry is always inversely proportional to the judgement of the buyers.

Web 19

A Compilation of the Web's Best Advice for Entrepreneurs

Platforms and Networks

Rose is CEO of AngelSoft, a platform that provides web-based planning tools for angel investors and entrepreneurs (NEW 11/29) Marc Andreessen on how much money to raise -- and how much is too much (NEW 11/29) Atlas VC Fred Destin on what not to disclose to a VC when raising money (NEW 11/30) Equity simulator from OwnYourVenture that calculates impact on % ownership by round of $ raised, size of option pool, etc.

Choose Your VC Investor Carefully

Both Sides of the Table

Too much money flowed into VC in the past 10 years and it brought in too many people who became VCs for the wrong reason. And many of these people are money managers rather than people like Gus who inspire entrepreneurs.

Should Founders Be Allowed to Take Money off the Table?

Both Sides of the Table

If a company has reached a level of success, has been around for a few years and you believe the company has potential to break out into a much bigger company then you should let the founders take money off of the table. Not FU money, but “feed the family&# money. On a panel that I sat on with Ron in LA in 2008 he stated that there were no circumstances in which the founder should take money off of the table. I raised $500k in seed money to start the company.

How to find funding for your hardware startup while we’re waiting for the hardware revolution

Version One Ventures

Hardware requires time, money, and inventory. As a result, most venture capitalists are reluctant to touch hardware projects, opting for the lower costs and smaller risks of software. hardware (Photo credit: alorenzi).

[Interview] Toronto’s Michael Beattie, Founder And CEO Of MBM Consulting

YoungUpstarts

Success as an entrepreneur takes a lot more than an idea, a dab of seed money and, as they say, a wing and a prayer. It’s what became a problem for a few of the companies that we took over – they just let their labour market and their labour costs get out of control.

Financing risk

Chris Dixon

Startups that raise seed funding face the risk of not being able to raise additional money. If you are a company that just raising seed funding, financing risk should be top of mind. Basically you want to take the main risks that exist at the seed stage and eliminate as many as you can. Experienced seed investors can also advise you on this. Raise enough seed money. How much money will it take to hit those milestones?