- Idea stage. The first step toward a business with any idea is to write it down, and build a business plan around it. If you need help at this stage, look for a local university teaching online courses on entrepreneurship, or how to build a business plan. The alternative is to work with an innovation institute to evaluate your technology, or hire a consultant. If you need money now, is has to come from friends and family.
- Early or embryonic stage. The most common support organization at this level is called a startup incubator or accelerator, and these exist in most countries, usually sponsored by a university, local government organization, or even local individuals. Usually these will not give you money, but will provide very inexpensive space to work and office services.
Their real value is your access to senior advisors with experience, and other startups in the same stage. Sometimes these will ask for 5%-15% of your equity for their support services. They are not trying to make money, but simply to recoup their costs over time.
Separately at this stage, you may look for small funding amounts from Angel investors, called seed investments. Funding of $25,000–$250,000 may be available from Angels, who are private individuals spending their own money. The incubator organization can help you find them, or show you how to apply for a government grant.
- Funding or rollout stage. This is the time for you to step out on your own, find office space, and open your business. Once you have some traction, you can approach venture capital organizations, with funding amounts of $1–10 million for the real rollout, often referred to as the “A-round,” or first institutional funding.
Support organizations at this stage are usually professional financial advisors, or investment banks, which have nurtured relationships with institutional investors. These usually charge you a fixed fee up front, and then perhaps a small percentage of the raise.
- Growth and exit stage. Companies at this stage must have a large market, good traction, and be focused on scaling infrastructure and market adoption. This normally means more then 30 employees, and more then $1 million in revenue. Support organizations are investment banks, similar to the preceding stage.