Entrepreneurship Tips — Financing

Networking is always the best method to build your universe of contacts. Historically this was done by attending investor pitches, meeting other CEOs and Founders and working with consultants to target specific categories and profiles of investor. However, with COVID and more technology and social networks there is an increase in cold outreach through platforms like LinkedIn, Angel.co, angel syndicates and other platforms that allow you to publish your profile. Of course, crowdfunding is also a way to find angels, as these platforms have member that are active and want to invest small amounts in many deals.  This however a...

This is best answered by this diagram of statistical information. However, be aware these are the deals that report only and not all deals and so likely higher than the true averages because smaller angel deals are less likely to report to PitchBook. Learn more about our Growth and Scaling (GSP)Certification program for Managers For a free video consultation call on what yourcompany and team need to scale better No one really knows or can get data on all deals as they are private and may be between the company and on angel investor.  I would guess these valuations are doubled by...

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...