Ok, so you have your billion dollar idea and you have a few trusted people that want to build this product and a few advisors to help you along the way. Most great ideas sit on the shelf because they are lacking in one thing – money. The second thing is execution but if you don’t have money you usually can only execute things so far. We have gathered a few great resources to help you get the basics down.
Show Me the Money – Video on Funding a Small Business
Microsoft has built over the last few years some stellar small business resources and this video below is no different. This video is an overview on the types of funding and how to raising money for your small business. It only 3 minutes long and is really great and to the point. Check this out:
So, you now know there are a few types – bootstrapping, debt financing, friends and family, angel investors and venture capitalists.
Things You Need to Get Ready
In researching a general set of steps to get your business ready for funding I came across this great article on VentureBeat called Startup Fundraising 101. The bottom line is that you must put together right structure, package the business for presentation, figure out how much you need and identify your ideal investor. I would refer to the types of investors reviewed in the video above. Once you are ready you need to think about valuation or how much your business is worth and what an investor would get in exchange for that investment. You need to put your pitch together and get out there.
I picked a particluar section from the post on Venturebeat that dives into figuring out how much you need. This aligns with the theme of this post on funding your startup and there are some points that need to be repeated. Check it out below.
How Much Do You Need?
You can do a simple or detailed analysis of your expenditures for product/service development, salaries, general and administrative expenses and marketing. How deep you go with this is up to you – but the analysis needs to take place regardless.
Obviously, startup costs vary greatly depending on industry. Just remember to have enough runway to raise your next round and not lose momentum. Also, expect unexpected costs. Adding a 30 percent buffer to your financial projection can be a lifesaver.
Images: Venturebeat
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