Monthly Archives: August 2014

3 Southern California Universities Are Awarded 3.75 Million Dollars to Stimulate Technology Innovation

Southern California Universities Get Funded from The Startup Garage

3 Southern California Universities Are Awarded 3.75 Million Dollars to Stimulate Technology Innovation

The fall 2014 semester has started for college students across the United States.

However, for a select group of USC, UCLA, and Caltech students, September 1st will mark the beginning of a new type of curriculum and collaboration.

Thanks to the National Science Foundation (NSF),
USC, UCLA, and Caltech students will have the opportunity to join an exclusive technology hub,
The Innovation Corps program or I-Corps.

The I-Corps is an entrepreneurship network for scientists and engineers.

The 3 year 3.75 million dollar joint grant into the 3 Southern California Universities encourages instruction and communication beyond University laboratories. The program fosters a collaborative education system and research infrastructure, allowing for scientific discoveries to be adapted into the commercial marketplace.

Ultimately, transforming research studies into useful product and services to positively impact the social and economic landscape.

“The NSF I-Corps initiative is a paradigm shift, that will facilitate cultural change in universities and research centers. It is no doubt one of the nation’s signature programs for promoting entrepreneurship and startup creation.”

The new Southern California innovation hub or “node,” joins five pre-existing I-Corps regional nodes located in New York City, Northern California, Washington, D.C, Michigan, and Atlanta, along with fellow newcomer Texas.

“NSF expects the new Southern California node will draw upon the deep well of talented people in that region, strengthening an already robust national innovation network.”

I-Corps Southern California is anticipating partnerships between the schools of medicine, business, and engineering.

If accepted into the program, participants will join a three-person team, which includes a NSF- funded researcher, a business mentor, and a graduate student. The team then receives a 6-month $50,000 grant, to turn an idea into a real world product or service.

I-Corps have been around since 2011, with roughly 50% of the 319 student faculty research teams going on to create a Startup.

Anticipate Fall 2017 to be a revolutionary time in Southern California’s Startup history.

 

Whether you have a question about your Startup or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

How to Make Family, Friends, & Founders (FFF) Investment Legit?

Friends Family and Founders Invesstment from The Startup Garage

How to Make Family, Friends, & Founders (FFF) Investment Legit?

Welcome to video Fridays from The Start Up Garage


A place where The Startup Garage’s team, answers questions directly from viewers

Key Take Aways From Video:


1) The first thing you want to make sure of is that your startup is incorporated

2) The second thing you’ll want to consider is whether you’ll offer
debt or equity

3) One of the commons documents that a lot of states will require is called a PPM

4) Get your paperwork in place or it will come back to haunt you.

 

Complete Transcript Below:

Question= I need to have in place to make my family’s investment in my startup legit?

Well Michelle this is definitely a common question that we get all the time, and some people avoid doing the proper paperwork, and it usually comes back to haunt them in the startup process, so I highly recommend you get the proper paperwork in place. The first thing you want to make sure of is that your startup is incorporated.

There’s a number of different types of corporations: SC, LLC, and you’re going to want to talk to an attorney about that to determine what type of corporation you want to set up.

The second thing you’ll want to consider is whether you’ll offer debt or equity. If it’s a debt investment then you’ll want to set up a promissory note or a convertible note, and your attorney will also be able to get those documents for you.

If it’s an equity investment, meaning you’re going to give them shares in your company, then that varies state by state. It also has a number of different variables that will depend on what the requirements are that will make that a legitimate investment.

One of the commons documents that a lot of states will require is called a PPM. So those are just some of the basic outlines of what you’re going to want to put in place, before you get your family investment.

Whether you have a question about your business plan or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Angel Investments Soar in the U.S. Along with the Tech Coast Angels

Angel Investments Soar in Q1 along with Tech Coast Angels

Angel Investments Soar in the U.S. Along with the Tech Coast Angels

The Q1 2014 Halo Report was released recently by the Angel Resource Institute, Silicon Valley Bank and CB Insights

In a collaborative effort to raise awareness of early-stage investment activities by angel investors the Halo Report researches and analyzes angel investment activities and trends in North America.

This quarter’s report card will one most investors in the U.S. will be proud to share.

“Median angel round size increases to $980k, while pre-money valuations rise to $2.7 million in the quarter”

What’s this mean for Startups looking to raise capital?

It is one of the best times in history to get funded.
Especially, if your startup relates to the Internet, Healthcare, or Mobile, which make up 71.5 % of deals in the quarter.

“Opportunities are great for startups seeking funding today,” said Rob Wiltbank, Vice Chairman of Research, Angel Resource Institute.

Are you a California based Startup? Consider your ability to get funded that much more likely. California angels invested heavily locally accounting for 1/3 of all deals.

One investor network, Tech Coast Angels, seized the spotlight and proves that “your network, is your net worth.” Tech Coast Angels secured the “strongest network” spot on the Q1 Halo Report out of 370 angel groups, alluding to their greater ability to raise capital, as well as offer strategic expertise in a given area.

Perhaps this is due to their investor membership application process itself, which puts network and community 1st and money 2nd.

“You might think it’s to make money, but for many of us it’s a way to give back to the community, to help build successful companies and to participate in the satisfaction that comes from this involvement. And we hope to make money, too.”

Tech Coast Angels claims to be largest angel investor network in the Nation. Since 1997, and TCA has helped their portfolio companies attract more than $1.4 billion in additional funding. TCA is a catalyst in helping build Southern California’s economy into a thriving center of technology and entrepreneurship.

Feeling inspired and ready to #GetFunded?
Tech Coast Angels is hosting a quick pitch competition in San Diego Thursday Sept 25th, 2014.

Quick Pitch is a must attend event for entrepreneurs looking to jump-start their ventures and for investors seeking to learn about the latest innovations in Southern California. Be sure to say hello to The Startup Garage team at the event!

Whether you have a question about your pitch or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

How to Avoid Startup Burnout?

Startup Burnout from The Startup Garage

How to Avoid Startup Burnout?

Welcome to video Fridays from The Start Up Garage

A place where The Startup Garage’s team, answers questions directly from viewers

Key Take Aways From Video:

1) Force yourself to take breaks. And those breaks are both hour to hour and day-to-day and also longer breaks like vacations.
We address these questions in more in our blog post “Are you Running a Business or is your Business Running You?
“Are you Running a Business or is your Business Running You?

2) Day to day at every hour and fifteen minutes, take a break to stay focused.

3) Take at least a half hour lunch break in the middle of the day just to break things up.

4) Taking a Saturday or Sunday or even a day during the week off when you just check in with yourself and refocus.

Complete Transcript Below:

Question = “How Can I avoid Startup Burnout?”

Well this is a very common issue that most entrepreneurs face. You get all excited about your new company and you just start working, and you work and you work and you work. And sometimes you might have another job and you come home and work on the nights and weekends. Well this could work for a short period of time, but over time you can definitely get burnt out and I know from personal experience. So I found a very easy way to avoid that.

I force myself to take breaks. And those breaks are both hour to hour and day-to-day and also longer breaks like vacations So I found that day to day that every hour and fifteen minutes I need a break and that’s so I can stay focused, I can check in to make sure I haven’t wondered off into some other task that’s not really that important. When I was not taking breaks sometimes I would spend hours down some rabbit hole just wasting my time. So I take a break about every hour and fifteen minutes and also make sure I take at least a half hour lunch break in the middle of the day just to break things up.

And then I have also found that you can’t work but so many days in a row. You need some days off. Or I need some days off and I’ve found that working with other entrepreneurs, most other entrepreneurs need that as well. Taking a Saturday or Sunday or even a day during the week off when you just check in and you’re like “Listen I’m not focused and I really don’t have that energy to do that today.”

Don’t feel bad about taking that time off. So hopefully that helps and continue to take breaks, you can stay focused and make better decisions which will lead to having to work less to accomplish the same goals.

Whether you have a question about your business plan or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

How To Evaluate Your Startups Business Model

How To Business Model

How To Evaluate Your Startups Business Model

The business model is the means by which your company makes money for the value that you deliver to your customers.

It is the strategy for how you monetize your product or service.

Your customer will be the ultimate judge of whether your business model works or not.

As a result, it may take trial and error to figure out the best model for your business.

Nonetheless, there are some important steps you can take to help ensure you get started with the best business model possible.

Step 1: Evaluate Your Competitors

By simply looking at your competition you will learn about the business models that your customers potential currently have to choose from. Whether you replicate a competitors business model or your deliver additional value to the customer by improving their business model, it is important for you to know what your customers’ options are.

Step 2: Understand Your Customer

Are you selling to men, women, or children? Are you selling to the wealthy or the poor? Is your product or service an everyday purchase or a luxury purchase? What drives your customer to purchase your product? Knowing the answer to these questions and truly understanding where your customer is coming from will help you determine the best model for you.

Step 3: Determine Your Cost of Sales

It is extremely difficult to determine your price and business model unless you know your cost of sales, also referred to as Cost of Goods Sold (COGS). Without this information, you won’t know whether your price generates a gross profit or a loss.

Step 4: Determine Your Operating Expenses

Every business has some cost of running the business that is not directly related to the sale or a product or service. For example, office rent, marketing budget, accounting, etc. It is important that you understand this cost structure as well so that you can turn a net profit once these expenses are accounted for as well.

Step 5: Compare Business Models

You will want to take your top 2 or 3 business models and build out a complete set of financial projections for each so that you can test the key variables of the business models and compare them with one another.

 
Below is a list of the most common business models:

  • 1. Brick and mortar
  • Whether you open your own brick and mortar retail store or you sell your product wholesale to a brick and mortar retailer, one of the oldest and most basic business models is a traditional storefront.

  • 2. Direct Sales
  • Direct sales is a method where the company sells directly to the end-user via a sales force. By cutting out the middleman, direct sales usually allows the company to sell the product for less and provide value to the customer via reduced prices.

  • 3. Subscription
  • The most obvious example of a subscription revenue model is a magazine or newspaper. Subscription business model is very popular and lauded among business owners due to its recurring revenue nature where gaining one new customer results in ongoing revenue throughout the lifetime of that customer.

  • 4. Multi-Level Marketing
  • Multi-level market, or network marketing, is a model where independent marketers buy a company’s products and sells them to consumers directly as well as to other “downline” marketers who in turn do the same. Each marketer in the “downline” receive a commission on that sale.

  • 5. Auction
  • The auction business model is free-market capitalism at its finest where the customer who is willing to pay the most gets the product.

  • 6. Service
  • The service industry is very broad and includes many sub-models but at its core, consumers pay a flat rate or an hourly rate for services rendered.

     

    Whether you have a question about your business plan or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

    How To Name Your Startup?

    How to Name your Business from The Startup Garage

    How To Name Your Startup?

    Welcome to video Fridays from The Start Up Garage


    A place where The Startup Garage’s team, answers questions directly from viewers

    Key Take Aways From Video:

    1) What do you want your Startup to be remembered for?

    2) A lot of companies make their name very descriptive, and get pigeon-holed in that one niche, and then in the future want to expand into different markets because they’re stuck with that name.

    3) The best name you could come up with is one where people want to wear it and people want to put it on a sticker somewhere and people want to do the advertising for you. If you can get people to do your advertising for you then you have a really great name.

    4) One thing to really consider in the digital age is the URL and what the .com is going to look like, creating an effective online presence

    5) Is this business name going to fit the mold of the company as I’d like to see it in the future?

    Complete transcript below:

    Question= “How do I go about naming my startup?”

    I like to start with a couple of pretty basic questions. Really what do you want to be remembered by? Is it something that is really going to make you stand out? Or is it to blend in? A lot of financial institution types give themselves very descriptive, by the book names to get that initial market share. And then once they do they kind of achieve that first step, and then they go “Oh we wish we positioned ourselves a little bit more edgy, you know make it stand out a little bit”.

    Standing out, going that route often once you get there is a good way to go, so something to think about. A lot of companies make their name very descriptive, and get pigeon-holed in that one niche, and then in the future want to expand into different markets because they’re stuck with that name. You know a lot of companies think “Oh we have this name and this brand, and if we change it they won’t know who we are”. And that is the case you have to be careful about it, but really don’t be afraid to re-brand yourself.

    The name doesn’t carry as much weight as you think it does. The best name you could come up with is one where people want to wear it and people want to put it on a sticker somewhere and people want to do the advertising for you. If you can get people to do your advertising for you then you have a really great name. There’s definitely some routes you can go with how to name it. The Startup Garage for example we named our space, our virtual space as the Startup Garage, which was really brilliant if you ask me.

    Another route to go is sort of creating a new name with the sounds that your market can relate to. A good example of that is Nike. And then one thing to really consider in the digital age is the URL and what’s going to look like. Te dot com credibility has carried a long way. The perception of having a dot-com is that you’re established, you know you have that space so that’s something to consider, Although don’t be afraid to get a little bit adventurous with your URL because the truth is that of they want to find you they will.

    But one thing to really be concerned with the URL is the spelling. A lot of times misspellings direct traffic to the wrong space so you have to be pretty careful about that and make sure it’s well thought out before executing, so keep those questions in mind when choosing a name for your business and just think longevity. Is this business name going to fit the mold of the company as I’d like to see it in the future?

    Whether you have a question about your business plan or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

    The Past, Present and Future of Capital Funding

    Past Present And Future of Capital Raising from The Startup Garage

    The Past, Present and Future of Capital Funding

    The Past, Present and Future of Capital Funding

    The Internet and the integration of valuable software into corporate systems, has disrupted almost every industry there is, laying bare vast quantities of knowledge, which in the past was extremely well hidden and only known to a privileged few.  Just 10 to 15 years ago, you had to be lucky to find the right “know how” and get the right connections. In fact, breaking into certain industries could often take a whole generation or more. Now, those days are gone.

    This phenomenon of “open knowledge” we live in today opens up all kinds of opportunities for entrepreneurs and for investors as well.

     

    This knowledge is laid bare through information, blogs and media all available over the Internet; information that was not available in any way shape or form some ten years ago.

    As a modern entrepreneur, all you have to do to find out what a venture capitalist is looking for is go to a VCs blog.
    Some of the most respected VCs now share their insights, the process,  the things they look for in a startup and even information they require in a specialized business guideline.

    When Did It All Start?

    We can say that venture capitalists like Naval Ravikant, Fred Wilson and Brad Feld were pioneers. They began to open up and tell us what they wanted to see through their blogs back in 2002 and 2003.  Later we saw companies like Venture Hacks and The Funded pop up. These sites even allowed people to begin rating VCs – a feature that disgruntled many an investor.

    Their Contribution

    Thanks to these blogging pioneers, we now have explicit and clear information on what a venture capitalist looks for, what a term sheet is and how to reach them. These were once hidden clues that only the very clever entrepreneurs could find.

    The Next Step

    Alongside this initial contribution we’ve also witnessed an incredible advance in technology, which significantly reduces the cost of launching a new company. This means many new startups don’t need those large VC funds to get started. This opened the doors to SuperAngels or MicroVC.  This is an investor that has a collaborative mindset, one that doesn’t have a large board of directors, and one who offers easy terms. In turn this opened up a new trend for investors, that of open discussions, personalities and easier terms.

    Now Comes the VC Service Provider

    VC firms are now so open that many have changed the way they do business completely, making the VC a service provider.  The software they use to streamline their startup networks and companies has gone a long way towards making this possible.

    Government Help

    The federal government has also put its two cents in with The Jobs Act and Crowdfunding

    This gives entrepreneurs online options for raising the money they need.

    The Future

    Many angel investors and entrepreneurs feel we are on the brink of new change. They believe the average business bank loan may quickly go out of style, and instead people will fund other people; mentor them and network them with others.

    In exchange investors will share in their success. If they can’t pay you back, then no consequences, but if the entrepreneur is successful then so is the investor. The key to doing this effectively will be through the use of algorithms which identify the best people to fund.

    How Long Does It Take to Raise Capital?

    How Long Does It Take to Raise Capital? from The Startup Garage

    How Long Does It Take to Raise Capital?

    Welcome to video Fridays
    from The Start Up Garage

    A place where Tyler Jensen, The Startup Garage’s founder, answers questions directly from viewers

    Key Take Aways From Video:

    1) The average time is somewhere between three to six months for both you Angel round and your Series A round.

    2) It really breaks down into three major steps. There’s preparation is step one. Pitching and due diligence is step two. Negotiating and closing the deal is step 3.

    3) Preparation, this can take anywhere from one to three months on average

    4)Pitch your potential investment opportunity to them. If they’re interested they’ll move into due diligence, which means they want to find out a lot more information out about you and your business. This step two can take 1-3 months as well.

    5) Negotiation and closing the deal. Getting all the terms down that you and the investor will agree upon into some legal documentation. This can be done anywhere from one week to one month.

    Complete Transcript below:

    Question= “How long does it take to raise capital?”

    Tyler Jensen: That’s a great question, one that I get all the time. The answer is that it varies. The average time is somewhere between three to six months for both you Angel round and your Series A round. It really breaks down into three major steps. There’s preparation is step one. Pitching and due diligence is step two. Negotiating and closing the deal is step 3.

    In step one preparation, this can take anywhere from one to three months on average. This is where you put together your business plan, your pitch deck, your capital strategy, and achieve any business milestones that investors are going to want to see before you raise capital.

    Once that is all done you go into pitching and due diligence. This is where you identify the potential investors, contact them, and then pitch your potential investment opportunity to them. If they’re interested they’ll move into due diligence, which means they want to find out a lot more information out about you and your business. This step two can take 1-3 months as well.

    And then if you get through that process and they’re still interested, then you move into negotiation and closing the deal. This si simply getting all the terms down that you and the investor will agree upon into some legal documentation. This can be done anywhere from one week to one month.

    Whether you have a question about your business plan or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!