My thoughts on this have changed a bit over time, as the general pace of—and level of activity in—the startup world has begun to hyper-accelerate. It’s always a good idea to be able to approach someone with whom you’ve had at least a nodding relationship, because that immediately differentiates you from a pure, over-the-transom funding request, and you are much more likely to at least get an answer. Read more
I’m not much of a television person, but my family loves one of the popular “reality” shows, called “So You Think You Can Dance,” so I’m sort of forced to watch it every week. Over time, I’ve concluded that even startup entrepreneurs can learn a few things from this one. Of course, you must ignore the pomp and circumstance of the TV staging.
I’m on the selection committee of our local Angels group, so I know that every CEO approaching our group for funding goes through ten minutes of creative “dancing,” to give us a basis for selecting startups that are most qualified and “ready” to proceed to the next level. If selected, they go through it again in the real meeting of 40-60 investors. It’s tough and not fun for either side. Read more
Marketing strategy actually is quite important to most investors. The bottom line is that if no one shows up to buy or use your product, it doesn’t matter one whit how cool or great or innovative it is. And investors do not like top-down projections (“we’ll get a 10% market share…”). They very much want to see how you are going to get your first customer, and your second, and your third.
*original post can be found on Quora @ http://www.quora.com/David-S-Rose/answers *
If you expect to succeed in the thrill-a-minute, roller coaster ride of a startup, let me assure you it takes more than a good idea, a rich uncle, and luck. In fact, the idea is often the least important part of the equation. Most investors tell me that they look at the people first, the business plan second, and only then at the idea.
If you want some tips to beat the insurmountable odds, take a look at the following concepts, adapted from Richard C. Levy’s book, “The Complete Idiot’s Guide to Cashing in On Your Inventions.” He was talking about inventions, but I think his concepts apply perfectly to any entrepreneur starting a business: Read more
This is changing as the whole world of venture/angel/seed funding is rapidly morphing, but typically a ‘real’ Series A round is small enough for one traditional venture fund to do the whole thing itself. Very occasionally, they might split it with another fund, but that would probably be the exception.
What we are often seeing, however, is large-ish “seed” rounds of up to as much as $1-2 million, led by an early-stage seed fund, “super-angel” or angel group, which might put in +/-50% of the round, with the balance made up of other seed funds and value-adding angels (‘super’, ‘grouped’, or otherwise.) Read more
Wondering how to get investors’ attention or how to deliver a perfect pitch? Gust has teamed up with LivePlan to equip you with the best tips for pitching investors and expert advice to increase your chances of getting funded. Join us for this revealing webinar, How to Pitch and Get Funded, on November 20th at 1pm ET (10am PT). The webinar will be led by Gust’s CEO, David S. Rose, who’s dubbed “The Pitch Coach” for his extensive work with early stage entrepreneurs, and LivePlan’s Caroline Cummings, who has raised almost $1 million in startup funding.
In the webinar, you’ll learn:
- The different ways to raise funding
- The purpose of the pitch
- The components of a successful investor pitch
- How to get investors’ attention
- How to craft a pitch in under an hour
- What investors want to hear (and not hear!)
- Common mistakes from the investor’s point of view
- How to get access to angel investors
All registrants will also receive a free copy of the ebook How to Pitch and Get Funded by Caroline Cummings.
Equity-based crowdfunding (that is, providing regular people with the opportunity to purchase stock in private companies) will not be legal in the US until the first quarter of 2013 at the earliest. At that time, any company planning to operate as a “funding portal” will have to comply with an extensive set of rules and regulations established by the U.S. Securities and Exchange Commission, which have not yet been released.
Project-based crowdfunding (that is, providing individuals or companies with the opportunity to accept donations from supporters, or pre-sell their products) is currently legal, and is exemplified by sites like Kickstarter. Read more