Entrepreneurship Tips — Financing

Yes, assuming you have not successfully closed a similar round of financing before, this is a good idea that will generate a large return on the investment. It is likely the difference between success and failure, or at least getting a deal done in six months instead of two years of very expensive “learning”.  The financing process is complex, and most will learn the hard way over many months or even several years of mistakes.  The lost opportunity cost can be millions.  This is super dumb when compared to spending a few grand on a quality consultant with experience in...

This table shows the typical sources that are best based on your company’s stage of development. Your mileage may vary.   Friends & Family Angel Investors Venture Capital Crowdfunding Usually Called Friend and Family Money Seed or Bridge Series A, B, C etc. Several types depending on size. SEC regulated. Types are CF, A which have different requirements for reporting, etc. Employees 0 to 10 1-15 10+ to 500 0 to infinity Annualized Revenue $0 to $500K/year $0 to $2M, more the better. Path to profits with scale clear Rarely $0 or less than $500K annually, but can be any...

These stages have evolved over time and the ranges are somewhat elastic, mainly based on the quality of the team involved.  If you have three top people with 15+ years’ experience and success each as CEO, Chief of Product Development and head of sales/marketing you may be able to get a pre-money valuation of $5M to $10M today with a quality deal. With just a founder and a business plan, your company is likely worth less than $500K.  This assumes a $1B market potential, $100M+ revenue potential in five year (top 5% of all companies ever)  and some nice progress...

Absolutely not. These people are usually pretty much scammers. It is illegal for anyone, except SEC licensed brokers, to sell stock to other people. There is some gray area here, as they can make introductions, but these usually have no weight at all with investors.  And they can never take a percentage of the stock or cash in the close for these “introductions”.  Run, don’t walk from anyone seeking a percentage of funds closed to be your “finder” or “Consultant” to do introductions. Click here to get this Financial Package How to Raise Millions for Any Company - Online Video...

Firstly, there are several categories of help, and some deserve the cost and effort while others do not. Finders, people that claim they will introduce you to investors are generally just conman, or women.  Rarely, if ever, do these people have any real influence or credibility.  By definition, if they are getting paid something to do this, then they have lost all credibility by creating a conflict of interest.  They have an instant conflict of interest. A “warm referral” is free because the person knows enough to be confident in you and your pitch, at least enough not to embarrass...