5 Clues To Investor-Friendly Financial Estimates

Image via pixabay.com

Image via pixabay.com

Most entrepreneurs struggle with financial projections, not wanting to commit to numbers they can’t deliver, and having no clue what investors might consider reasonable. However, making no projections, or non-credible projections will get your startup marked as unfundable. I recommend a simple set of guidelines, which work for at least 80% of the business domains I see.

Equally important, you need to make these projections first as goals for your own use, to convince the team as well as investors that you have a business which is achievable. Projecting the financials should be the last step of your business plan preparation, since it assumes you already know the opportunity size, customer buying habits, pricing, costs, and competition. Read more

Martin Zwilling , Founder and CEO, Startup Professionals
August 10th, 2014

What’s actually required to start or close a funding round?

Technically, a “funding round” simply means a company accepting one or more investments from one or more investors on similar terms within a certain period of time. As such, this could cover many different things, such as:

  • Your parents loaning you money to cover your expenses while you code your product
  • 25 individual angel investors funding a startup on a convertible note
  • two angel groups investing money in Series Seed Preferred stock purchase
  • a single venture capital fund putting in the full amount as Series A Convertible Preferred investment

In all cases, the one fundamental requirement is that the company and the investor agree on how much is being invested, and on what terms. These items are included in what is known as a term sheet. What the terms end up being, and how a company and the investor(s) arrive at that term sheet, can differ widely. Read more

Inventor Entrepreneurs May Be The Rare Exception

Thomas_Alva_Edison1

Thomas Edison image via Wikipedia

In my experience, inventors and technologists aren’t interested or aren’t very good at building a business, and entrepreneurs aren’t usually good scientists. These people need to find each other, and can jointly make a great team for a new startup. Without the synergy, companies like Apple might never have gotten off the ground.

Historically, it’s also not often that a good inventor was also a good entrepreneur. There are some old arguments that even our entrepreneur heroes, like Thomas Edison, really cheated on the invention side. Most of the great entrepreneurs of recent times, like the young Steve Jobs, had a great technologist, Steve Wozniak, who could implement his dreams. Read more

Is it legal to have a crowd-funding site that gives equity as reward?

In the United States, equity-based crowdfunding will not be legal until January, 2013 at the earliest, when the SEC issues its rules regarding the process. It will then be permitted, provided that it is done in strict compliance with those SEC rules, and the provisions of the JOBS Act, which was signed by President Obama earlier this year.

*original post can be found on Quora @ http://www.quora.com/David-S-Rose/answers *

5 Entrepreneur Ideas That Investors See Too Often

People are always asking me for an inside tip on Internet sites that will be “the next big thing.” Those are hard, since someone has to invent something innovative, but I do have some views on other ideas whose time has come and gone.

In some cases, these are concepts that have already been done too many times, and the space is crowded. In others, the concept has been tried too many times, or no one has yet succeeded in making any money. Or both. Here are my favorites: Read more

When do you startups begin fund raising?

If founding a startup was easy, there would be a lot more of them, and the percentage that are successful would be much higher.

Unfortunately, it isn’t.

The essence of entrepreneurship is creating a new venture where one does not already exist in the market as you find it. As such, the founding process is one in which the entrepreneur is competing with market forces. Read more