One of the biggest reasons small businesses fail is that they run out of money before they can effectively compete in the market. That's why it's important to raise enough capital at the beginning.
If you really want to impress a startup founder as a potential employee, or you want to be a smart investor, you need to know the right questions to ask.
In my years of investing, I've developed a set of tough questions that are sure to elicit both information and a vibrant dialog—questions not on the usual checklists of angel groups or investors.
Too many people still believe the urban myth that you can sketch your idea on a napkin, and people will throw money at you. Fundraising is indeed brutally tough at all stages, and the seed funding is the hardest to find.
The new hot topic for entrepreneurs the last couple of years is crowdfunding, which is anticipated to at least supplement, if not replace, the slow and mysterious process of current Angel and venture capital investors. The problem is that crowdfunding means something different to everyone, and even I have been confused by the different ways the term gets used.
Startups ask me "How much money should I ask for?" The simple answer is the absolute minimum amount you need to make your plan work.
When in need of cash to fund your business expansion, you might consider initiating contact with an investment bank to discuss your options for an Initial Public Offering (IPO).
When you need a cash injection to grow your business, your two main options are equity financing and debt financing. In this two-part series, I'll cover the pros and cons of each.
Every investor expects to see some business traction, both before and after a funding event. If you have been working 20 hours a day, and spent your last dollar, but have no results to show, investors will be sympathetic, but will probably tell you that your dream doesn't have wheels. Traction means forward progress.
Some aspiring entrepreneurs are so desperate for funding, or naïve, that they ignore the obvious signs of scams and rip-offs on the Internet, praying for a windfall. One would think that with all the sad stories and tools published over the past twenty years, this problem would be behind us.