Bleeding Edge

Entrepreneurship Is a High-Stakes Game and funding your Startup is at the Heart of it all …

So here is the supreme list of the “dirty dozen” of Startup Capital Raising Methods that you can employ right away…

Because still today, after thirty plus years as an Angel investor — I get asked to mentor entrepreneurs and when we meet, always the first question is “How do I find the money to start my business?”

And I always answer that there isn’t any magic to it, and contrary to popular myth, it is quite easy to do if your business has the simple quality of being fundable.

Of course the Entrepreneurs always like to fantasize that somebody is waiting in the wings to throw money at them, just because they have a new and exciting business idea, that in due time — will no doubt change the world as we know it.

Once that exchange is done — we can move on to Reality Check territory, where I have to explain that there are many more options available for funding a starting business, than they might find when looking for financing to buy a car, a home, or any other major consumer item.

So if you have the urge to be an entrepreneur, I encourage you to think seriously about each of these, before you zero in on one, two, or three, and then get totally discouraged if those few options, don’t work for you.

Of course, every alternative has advantages and disadvantages, so any given one may not be available or attractive to you.

For example, professional investors put great priority on your previous experience in building a business, and they expect to own a portion of the business equity and control for the funds they do provide. These are tough for a first-time entrepreneur.

Thus it is always a question of what you qualify for, and what you are willing to give up, to turn your dream idea into a viable business.

So here is my list of the 12 most common sources of funding today, in sequential form, with some rules of thumb to channel your focus…

Topmost are the incredible DOTs that you can see up above that help involve and inform the fundraising of every intelligent Startup that seeks the help of the American Angels.

Naturally every funding decision is a complex tradeoff between near-term and longer-term costs and paybacks, as well as overall ownership and control. Yet with the many options available, there is no excuse for not living your dream, rather than dreaming about living. As a general rule, professional investors will expect that you have already put your own money in the Startup and that you already have commitments from friends & family, in order to show your credibility. If yourself, or your friends and family don’t believe in you, you shouldn’t expect others and especially professional outsiders to jump in. Your own pocketbook, and your F&F are the primary source of personal and non personal funds for very early-stage startups.

As you read this article, you shall see, that all of the other options besides the incredible DOTs of the AMERICAN ANGELS, require far more work and commitment on your part, in order to maintain and grow the Startup because there is no Alladin’s magic djinnie, Irish pot of gold at the end of the rainbow with a green gnome marking the spot, or some treasure money from a long lost Pirate relative that hid his Spanish golden doubloons in a deserted island of the Caribbean, but there are DOTs and I see them everywhere…

However here is the supreme list of the “dirty dozen” of Startup Capital Raising Methods that you can employ right away:

1) The incredible digital currency named DOT allows for an Internet Coin Offering (ICO) to raise abundant capital for your Startups. This method of the DOTs is the newest digital currency that helps us perform an ICO with a digital currency that is solid, and as a FinTech software token, is not subject to SEC approval, but rather is a simple SAAS service method of raising Capital for a Tech worthy StartUp. The American Angels specialize on education the World about this method of ICOs for all Tech & Science Startups, and this is the current iteration of this budding method of Fundraising.

We got our start in the Silicon Valley and in the Pacific Northwest, and You could attend a meeting of the American Angels in Seattle, in Bellevue, or in San Francisco, and Stanford University, in order to see if this system of ICO funding via the digital SAAS token currency DOTs, is for you, and for your Startup. Look for upcoming meetings at the American Angels Crowdfunding Meetup site here: http://www.MeetUp.com/AmericanAngels or http://www.MeetUp.com/AngelInvestors and RSVP to the next meetings to educate yourself fully.

2), 3), 4), Bootstrapping, by Self, Friends, & Family. The truth of the matter is that you can partly or even fully jumpstart your Startup with these Big Three, at the earliest stage. These are the TOP-3 methods of funding your Startup: 1) By Yourself bootstrapping it. 2) By your Friends pitching in. 3) By your Family giving you the capital you require. So these 1,2,3, are the top funding mechanism for Startups because these days the overall starting costs of a digital business, are at an all-time low, and over 90% percent of all startups are self funded, through bootstrapping for the first year of operations and sometimes all the way up to their 18 month energy limit. Of course for someone straight out of school, it may take a bit longer to save some money before you start your company, but what the hell are you going to do with the Financial Aid and your Student Work, if you cannot save some of it for your dreams?

And this method truly helps your Startup dream come to the world and grow organically, in the protected garden of your self, friends & family’s patch. And there are many other massive advantages of bootstrapping, such as the fact that you don’t have to give up any equity or control to others.

Yet you still have to built an Executive team of co-founders, and share fairly equitably some of the Startup equity with them. But for all practical purposes the business is owned by the Founders alone, at this stage, and this gives you a certain kind of Freedom that is unprecedented, and a rather freeing experience, to do as you damn well please.

5) Small Business Grant: These are government funds allocated to support new technologies and important causes, such as education, medicine and social needs. A good place to start looking is Grants.gov, which is a searchable directory of more than 1,000 federal grant programs. The process is long, but it doesn’t cost you any equity.

6) Start an online crowdfunding campaign: This newest source of funding, where anyone can participate as the JOBS Act passed by Congress in 2011 and regulated by the SEC in 2015, is exemplified by the internet schemes that help you fund your project online and can be found in sites such as Go-Fund-Me, Indie-gogo, Kickstarter, etc. Here is where many internet savvy people make online pledges to your startup during a campaign, or to pre-buy the product for later delivery, or give donations, or qualify for a reward, or even for a partnership, or a job deal, or to participate in the gig economy and the sharing internet economy, etc.

7) American Angel Investors from your local business community: Most metropolitan areas have groups of local high-net-worth individuals interested in supporting startups, and willing to syndicate amounts up to a million dollars for qualified startups. Use online platforms such as Gust to find them, and local networking to find ones that relate to your industry and passion. For example American Angels is everywhere, and can be accessed from here: http://www.meetup.com/AngelInvestors or here: http://www.AmericanAngels.net

8) Venture Capital Investors: These are professional investors, such as Kleiner Perkins, Sequoia, Draper, Accel Partners, Bain, Graystock, and many others who invest their general partners’ funds, that are derived from institutional Capital, in some qualified startups, usually Tech and Science, with a proven business model, great Executive team, and ready to pursue growth & scale. These VC investors typically look for big opportunities, needing a couple of million dollars or more, with a proven team of executives. Always must look for a personal and warm introduction, to make this work.

9) Join an incubator or an accelerator to help yourself find your way and the means to find your niche. These organizations, such as Y Combinator, and many others, are quite popular these days, and are often associated with major universities, community development organizations, or even large companies. Most provide free resources to startups, including office facilities and consulting, but many provide seed funding as well.

10) Negotiate an advance from a strategic partner or customer and thus find a major customer, or a complimentary business, who sees such value in your idea that they are willing to give you an advance on royalty payments to complete your development. Variations on this theme include early licensing or white-labeling agreements.

11) Trade equity or services for startup help, for your early stage needs. This is most often called bartering your skills or something you have for something you need. An example would be negotiating free office space by agreeing to support the computer systems for all the other office tenants. Another common example is exchanging equity for legal and accounting support.

12) Seek a bank loan or credit-card line of credit: In general, this won’t happen for a new startup, unless you have a good credit history or existing assets that you are willing to put at risk for collateral. In most of the United States, you may find that the Small Business Administration (SBA) can get you infusions of cash without normal backup requirements.

And there are of course millions of other ways that you can raise Capital for your Startup.

So now is the time to go out and find yours…

Please keep in mind that all of these methods are available to all of you, and you are only limited by your resourcefulness, by your imagination, and by your creativity, in finding and connecting the DOTs, and the Capital, you need, and then pursuing them to your benefit, to the benefit of the Startup that you are building, and to the utmost benefit of that dent we’ve trying to put on the Universe…

Yours,

Dr Churchill

PS:

To your best success.

Use these Top Twelve Methods with Caution because they are highly effective and can be outlawed any moment now or within the next twelve months… 😉