Tag Archives: Startup Funding

Why A Business Plan Is Essential When Crowdfunding Your Startup

Business Plans and Crowdfunding

Why A Business Plan Is Essential When Crowdfunding Your Startup

Letting the crowd fund your startup doesn’t mean allowing your business plan to go unwritten.

In the business world, approximately 543,000 new businesses get started each month and funding those businesses comes from a variety of sources.

Most recently, startups are beginning to utilize crowdfunding sites to promote their ventures and raise the capital they need through online platforms.

Similar to the popular TV show Shark Tank, startups have the opportunity to present their business to a number of “backers” who can potentially finance their business. Such crowdfunding websites are making it easier for new business owners to spread the word of their company and search for possible investors.

On the flipside websites like Kickstarter, Indiegogo, and Fundable are allowing for investors to check out a multitude of emerging businesses for possible fruitful endeavors, which leads us to….


5 Reasons Why A Business Plan Is Essential When Crowdfunding Your Startup

1) A business plan will be used as a blueprint for your crowdfunding campaign.

It will help define the purpose of your business/project, how it will operate, specify the exact amount of capital needed, and it how it will reward/benefit those that invest. These details are the key ingredients necessary for a successfully funded campaign.

2) A business plan is a SYSTEM (S)aves (Y)ou (S)tress
(T)ime (E)nergy and (M)oney
when building and launching your business, both on and offline. Going through the process ahead of time, can prevent and even correct mistakes that might have otherwise gone overlooked.

3) A business plan is one of the most compelling marketing tools available to enroll others in your mission. After all, a crowdfunding campaign is only as successful as it’s amount of supporters.

4) A business plan will be used as an internal tool for you business as well, guiding your company through the first 3-5 years. Following this document with in your business will provide structure and stability, even during the most uncertain of times.

5) Eventually crowdfunding capital runs dry, and you need to look for your next funding source. Most likely that would be an angel investor, an individual who typically invest between $25,000- $100,000 of their own money. Angel investors want to see facts and figures. They want a well thought out business plan, one that demonstrates you have taken the time to do research, plan and organize your startup business. Exemplifying less risk and more return on investment.

2015 will be a revolutionary year for crowdfunding; with current trends stating an average of 325 new crowdfunding campaigns launching everyday.

This means investment opportunities and competition for funding are expanding at a rapid pace. Are you ready to #GetFunded?

Don’t let your business plan remain unwritten.

If 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 “Winterize” Your Startup For Success

How To “Winterize” Your Startup For Success

4 Tips To Get Your Startup Ready For Winter

Startups businesses, just like automobiles, require winterization in order to keep running smooth and stealth during the cold months ahead.

In this article, I’ll highlight the key components found in winterizing an automobile to help aid in Startup triumph.

    The Engine | The Motor of a Startup Machine

Behind every Startup business is the revving motor of an innovative product idea. A product or service, which solves problems and inefficiencies, while streamlining consumer inconveniences. It’s fair to say that outside “temperatures” like the stock market, banking institutions, and technology, influence the internal temperature of a Startups engine.

Is the motor of your Startup adjusting to the current and future market temperatures, or is your product sluggishly cruising down memory lane?

For automobiles driven in freezing temperatures, a thinner less viscous oil is recommended. What if the same holds true for Startups? In times of the “freezing” temperatures (whether in funding, manufacturing, or building a team) a thinner/leaner approach is taken.

The Lean Startup
movement pioneered by Eric Reis, a Silicon Valley entrepreneur, favors the #MVP or Minimum Viable Product. A product development approach, that places consumer interest first, in effort to eliminate risk and increase return on investment.

Make winter a time to flush out Startup ideas into form, inviting and encouraging direct feedback from prospective customers.

    The Battery | The Energy Supplier of a Startup

Don’t get left out in the cold. A thriving business’s greatest power source is the startup team, which supplies invaluable knowledge and resources. It’s true, teams like car batteries; need to be reliable, dependable, and have the ability to start and deliver regardless season or circumstances.

Winter is the prefect opportunity to check in with team members to review how energy/time are being “spent,” to ensure each team members input and output are firing in alignment for the common good of the Startup business.

The fate of your Startup Company depends a large part on your team. Evaluate and examine what inspires, motivates, and increases the voltage for your team members.
Perhaps it’s a monthly happy hour? A weekly creative brainstorming session? Working remotely once per week?

Hit on the power switch, and get your team is wired for success.

    The Tires |Startup Traction

The road to success for your Startup business is full of twists, turns, and various terrains. When a business is moving at Startup speed, proper traction is required.
Snow tires like Market Traction grip the startup roadside to increase performance and eliminate the risks and uncertainty involved in slippery startup slopes.

Market traction is a safeguard for both founders and potential investor, in communicating evidence of market demand and the future momentum of the company.

Winterize your Startup by researching, documenting, and analyzing the following:
• Profitability
• Revenue
• Active Customers
• Registered users
• Engagement
• Partnerships/clients
• Traffic

    Emergency Kit | Tools for Startup Survival

No one enjoys getting stranded in the cold, but when you have a well-equipped emergency kit, the situation becomes more bearable.

A Startup business survival kit should include the following 3 items:

• An air-tight business plan
• An Investor pitch deck
• A strong Entrepreneurial network

Cheers to your continued success regardless of the season!

 

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!

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!

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.

What Type of Funding is Best for My Company?

What type of funding is best for my company? From The Startup Garage

What Type of Funding is Best for My Company?

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) There are really three main sources of funding, and to determine which source is right for you, you need to know what stage your company is in and how much money you need.

2) Those 3 main sources for funding are:
– Friends, Family, and Founders
Angel Investors
– Venture Capitalists

3) Generally family, friends, and founders are the first one and they invest anywhere from $25,000-$250,000 and they do it right as the idea is getting started.

4) Angel investors typically invest $250,000 – $1,000,000 and they want to invest after you got a business plan going, a team, maybe you’ve got a prototype developed.
They want to see some traction with your business.

5) The last stage is a Venture Capitalist. It’s also called a Series A. Then you could have Series B, C, and so on.

Complete Transcript below:

Question= “What type of funding is best for my startup?”

Tyler Jensen: Yes, this is a very common question that we get all the time, and it can be totally overwhelming and there’s all this information out and it’s really hard to get through all the details of it, so I’m going to try and simplify it in the answer. There’s really three main sources of funding, and to determine which source is right for you, you need to know what stage your company is in and how much money you need. Those 3 main sources for funding are:

1. Friends, Family, and Founders

2. Angel Investors

3. Venture Capitalists

And they go in that order to determine your stage. Generally family, friends, and founders are the first one and they invest anywhere from $25,000-$250,000 and they do it right as the idea is getting started. The next one is angel investors and they typically invest $250,000 – $1,000,000 and they want to invest after you got a business plan going, a team, maybe you’ve got a prototype developed — They want to see some traction with your business. The last stage is a Venture Capitalist. It’s also called a Series A. Then you could have Series B, C, and so on. That comes along once you’ve taken that angel money and really gotten some customer traction and you’ve proved your model, you’ve proved your metrics, then the Venture Capitalists come in and that money’s really used to scale out, whether that be nationally or internationally it’s really for a large scale plan.

Nicole: If you have a question, feel free to post it below and we’ll see you next Friday.

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!

HBO Show Silicon Valley Shines The Spotlight on Business Planning

Silicon Valley Show On Business Plans from The Startup Garage

HBO Show Silicon Valley Shines The Spotlight on Business Planning

The clip below provides accurate yet comical insights into a typical angel investor meeting.

Key Take Aways From Video:

  • Investors are in the business to invest in companies, not just products.
  • Investors are not guidance counselors for your Startup.
  • Investors are smart and sophisticated, they want you to be prepared.
  • There are key Milestones investors care about.
  • One thing you want to never hear in an investor meeting
    “He doesn’t seem to know what he’s doing.”
  • Are you prepared to #Getfunded?

     

    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!

I Have An Idea For a Product. Where Do I Start?

I have a product idea. What's next? from The Startup Garage

I Have An Idea For a Product. Where Do I Start?

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. You want to start is with your research, specifically around the industry, market, and competitive analysis.

2. For the industry research, you want to know the size of that industry,

who the major players are, and who the trade associations are in that industry.

3. For ompetitive research. You want to get out there and look at all the potential competitors; these are both direct and indirect.

4. For market research. These are all the potential markets that you might be able to sell your product in and to.

Complete Transcript below:

Question= “I have an idea for a product…. Where do I start?”

That’s probably one of the most common questions we get from entrepreneurs. We give pretty much the same recommendation for everyone who asks that question. Where you want to start is with your research — and your research is around the industry, market, and competitive analysis.

On the industry side you really want to understand the name of your industry. Sometimes you cross over into multiple industries, so you want to know the different names that you may cross over into. You want to know the size of that industry. Who the major players are. Who the trade associations are in that industry. And just really learn about what goes on into the entire industry that you want to be a part of.

The second part is your competitive research. You want to get out there and look at all the potential competitors; these are both direct and indirect. Don’t skimp on this issue — the best part about competitive research is that you are going to get a ton of ideas and it’s going to improve your product idea as well, so just make sure you get out there and do as much competitive research as you can.

And the final area is your market research. These are all the potential markets that you might be able to sell your product to. This is the one we find that entrepreneurs get stuck on the most — given that they think they could sell their product to everybody. But you really need to break it down into small segments to understand why each of these different segments would buy your product. This is probably the longest part of the startup process is to really spend a lot of time learning all this information. Check back and we’ll let you know where you can find this information.

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!

Is a Business Plan Necessary?

Is a business plan necessary? From The Startup Garage

Is a Business Plan Necessary?

Welcome to video Fridays from The Start Up Garage


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

Key Take Aways From Video:

1. When starting a business you will almost always want a business plan.

2. Even if you do not need investors or a business partner, a business plan will help you answer critical questions.

3. Investors want and require documentation.

Complete Transcript below:

Question:

I’ve read that you really don’t need a business plan. Is this true?

Well, my short answer is no — it’s not true.

If you’re starting a company, there are a couple of main reasons why you’re almost always going to need a business plan.

The first one is that even if you don’t actually need the document of a business plan for an investor or business partner, going through that process of answering all the questions that a business plan will require you to answer is so critical early on. If you don’t do it early on it’s going to cost you a lot of time and money later on.

The second reason is that if you are raising money from anyone other than a close friend or family member, almost any serious investor is going to require that you have gone through the process of writing a business plan and they’re going to want to see that document.

Remember, “the worst business plan is one you never bother to write.”

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!

Need To Raise Capital For Your Startup? Ask A Celebrity

Need to raise capital ? Ask a Celebrity from The Startup Garage

Need To Raise Capital For Your Startup? Ask A Celebrity

There’s a new breed of angel investors, taking over the tech-funding spotlight, Hollywood celebrities, or rather tech-ebrities.

Tech ventures are exciting, popular and trendy, making investing in startups a must have for the rich and famous.

The roster of celebrity tech investors include:
Justin Bieber, Lady Gaga, Bono, Ashton Kutcher, Leonardo DiCaprio, Kim Kardashian, Justin Timberlake, Will Ferrell, Dr. Dre, Kayne West, Mc Hammer, Jay-Z, Will Smith, Jessica Alba amongst others.

Collaborations between Hollywood and Silicon Valley, aren’t entirely new.
They’ve been have been around since the dot.com boom in 1997.

It was then that the “godfather” of the movement, William Shatner, partnered with Priceline.com to become the official spokesperson for the discount travel website. Rather than accepting money for his role in the company, Shatner decided to take stock equity.

Celebrities took heed when 10 years later, Shatner cashed out his Priceline equity, to a resounding $600 million.

Suddenly, being a spokesperson and/or investing funds into underground technology startups, become the fast track to creating long term wealth to those celebrities, willing to take the risk.

“Like everyone else, celebrities are now hyperaware of just how many billions of dollars an early stake in, say, Facebook, could be worth down the road.”said Alan Hock, a partner at the law firm Moritt Hock & Hamroff who specializes in endorsement contracts for entertainers.

According to Rolling Stone Magazine Bono, the lead singer from U2, did exactly that.
His private equity firm Elevation Partners, invested 90 million for a 1.5% stake in Facebook.
When Facebook went public in 2013 and sold for $100 billion, he walked away with crisp $1.5 billion. It’s been rumored that Bono made more money investing in Facebook than he has with U2.

However, unlike traditional Angel Investors , world class musicians, artists, actors, and athletes aren’t always investing simply for a big payoff. Afterall, their jobs are not fueled on acquisitions and exit strategies.

It’s fair to say, we’re referring to individuals that have built their careers out of emotional creativity, passion, and determination. Present a viable business plan, while pulling at their heart strings, and you might just find your business funded.

Avid tech investor Aston Kutcher told TechCrunch founder Michael Arrington
“I really think that, technology probably has the greatest potential to accelerate happiness. Everybody sort of looks at investing and, you know, for me, if I don’t make any money, but what we deliver people — love and happiness and connectivity and friendship and health and whatever it is that we can deliver that ultimately leads to people’s happiness — I’m fine losing my money, if that’s the case.”

Bono shared a similar perspective on MSNBC:
“I got interested in technology because I’m an artist, I’m interested in the forces that shape the world, politics, religion, the stuff we’ve been talking about today. Technology is huge. I wanted to learn about it. People say it’s odd, ‘you’re a musician, why are you doing all this.’ But I think it’s odd if artists aren’t more interested in the world around them.”
 
Whether you’re in favor of the tech bubble reaching Hollywood or not, there’s no denying world of investment capital continues to expand.

There has never been a time in our history, that funding sources are have so readily available. Whether from Mc Hammer’s pockets or from various crowdfunding platforms, raising investment capital is more accessible than ever.

Are you prepared to #GetFunded?

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!