FUNDING

Raising money to fund your startup is an art.  The days when you could just write a business plan on the back of a napkin over lunch with a venture capital investor and magically receive all of the business funding you will ever need are long gone…or it was just a myth anyway.  Raising money is a process not an event, and it is hard work that always takes twice as long as the most pessimistic version of your plan calls for.  Don’t worry; good businesses will get funded, just not always on your schedule.  This book is not a get rich quick formula; however, it will guide you through the steps of funding your own business but, there are no quick fixes, no easy ways home, and there are no short cuts.

In this section, we deal with valuation of your business, what components add additional value and how they compare to each other.  At this point as you prepare to go raise equity capital, we discuss how to write a business plan and structure it the way venture capital investors want to see it.  We also discuss what other documents are required to complete an equity capital transaction, like the PowerPoint pitch, the financials you will need, and the elements of the elevator pitch.  The structure is important as to how to make a business plan attractive to the investor groups so that your business plan goes into the stack that will be read rather than the much larger stack that is tossed aside. We discuss financial forecasts and what business investors look for. 

When building your business plan and your presentation deck, make sure that your "positioning statement is clear".  Your positioning statement is a brief sentence with or without some bullets for emphasis that clearly explains what your company does and why the customer should take serious notice.  Also make sure that your value proposition is very clear. That is to say the customer perceives a real value from your product or service that they don't currently receive from others.  The worst thing that can happen to you is that you finish your presentation and the investor looks at you and says "I don't get it".

We discuss the term sheet, stock options, stock warrants, the due diligence process and how to prepare so that your deal will close in the shortest amount of time. We discuss the advantages to venture capital and the disadvantages and some of the things you should know before you start down that path. 

We also point out the other ways to fund your company both with equity capital and without.