27. July 2010 by Frank Goley, Business Consultant for ABC Business Consulting.

There are a multitude of ways to obtain the funds, networking and mentorship start ups need to really get their business off the ground. There are Enterprise Labs which will not just incubate but really have the tools, relationships, mentors, experts and funding to help you successfully model, fund and start up your business.

An example of one of these Enterprise Labs is the Kauffman Labs, which picks up to 20 founding groups per sector to go through their 6 month program to successfully start up. They provide the necessary education, tools, experts, mentorship, relationships, business modeling and the such for founding members of a start up to successfully obtain venture capital and come to market. And you don’t have to have a pedigree education to apply!

The competition is stiff but the process of competing is a great exercise for any start up, whether or not you are selected for the program. You gain so much experience and knowledge in the process of applying and competing, that it is highly advantageous. It gives you a great idea where you stand as a viable start up looking for VC.

Kauffman provides a plethora of resources for entrepreneurs, including Entrepreneurship.org, Kauffman FastTrac and the Urban Entrepreneur Partnership. Take advantage of these programs and resources from Kauffman and other foundations!

Video Resource: Kauffman Labs

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26. July 2010 by Frank Goley, Business Consultant for ABC Business Consulting.

If you are seeking funding in this recessionary market, then there are 4 Key Areas to pay attention to:

#1 - Business Track Record

Showing how you have run a successful business in the past or had an influential hand in running a successful business is critically important.

#2 – Experience

Detail how you have specific experience for the type of business, customer and market.

#3 – Niche Market Identification

Funders want to know you have narrowed down your customers into a profitable Market Niche which you serve well.

# 4 – Cash Flow

A Cash Flowing business is a much easier sell to a funder.

The KISS acronym applies. Keep it Simple. Apply these four key areas to your business and your funding search will certainly improve. Make sure you have a solid Loan Package and Business Plan to present to funders. Good luck!

For more information, please see my articles on Business Finance.

Video Resource:  The Importance of Cash Flow for Bank Finance

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23. July 2010 by Frank Goley, Business Consultant for ABC Business Consulting.

Ever heard of Crowd Funding? Want to raise capital for your business with out paying an interest rate or giving up equity? Crowd funding provides donations to your business for a reward and can be a viable capital raising strategy that has a strong social media influence.

Its Origins

Crowd Funding grew out of the internet phenomenon of raising donations for charities, political candidates, etc.  It was then used and now used pretty heavily to raise funds for musicians, artists and independent film makers. It has now evolved into a viable strategy for companies to raise funds.

How it Works

You register your business proposal on a Crowd Funding website like RocketHub or KickStarter. You provide different rewards for different levels of donations. Donation levels range from $5 to $1,000, and the larger the donation, the better the reward. Rewards aren’t an interest rate or equity stake, instead it is a thank you letter, a gift, a mention on a website, name of the donor put somewhere prominent, discounts, free products and so forth. Up to $250,000 has been raised using this method and many use it to raise $5,000 - $15,000. The Crowd Funding service takes a percentage of the total amount raised.  

Social Network Element

The success of Crowd Funding depends on its donors and those seeking the funding to spread the news among their social networks, particularly through FaceBook, Twitter, MySpace, YouTube and the like. It is important you have a planned fund raising strategy going in because these Crowd Funding services require you to raise the entire amount you are seeking in a certain time period, otherwise you don’t get any funding. Many who do this strategy correctly will raise more than they need.  

Use Crowd Funding to Get Closer to Your Customers

This is a real viable platform for you to really engage customers in your business, both existing ones and prospects. It gives them a real involvement in the success of your business and cements that necessary bond you need to really have “sticky” customers. Can you think of all the possibilities?

How to Do It

I recommend you go to the different Crowd Funding websites and see how it is done. You will see projects that successfully raised money and those who didn’t. Normally those who didn’t had a “wish” or “dream” rather than a viable plan. You can also gain some invaluable tips on what works for soliciting donors to your project by studying successful ones. Looking at the different projects also gives you good ideas on the different rewards you can offer and which ones worked. You will also see the dollar ranges that where most successful, i.e. $35 donation level with the right reward seems to be a hot level.

Be careful to see what type of projects and businesses are promoted on the Crowd Funding service and if it meets what you are trying to do. Also, some are really venture raising sites, which require an equity stake or other type of pay back. The two websites I mentioned seem to be good ones for most businesses and are true Crowd Funding platforms, but do your homework and you can find others too.

Video Resources

What is Crowd Funding and How it Works

Different Crowd Funding Services and Platforms

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20. July 2010 by Frank Goley, Business Consultant for ABC Business Consulting.

Nowadays companies have to look at unique funding arrangements as business finance is tight and markets fickle. Have you thought about bringing on an equity partner not for the cash they can provide but the expertise and services they can provide? Sometimes a company needs a certain service more than it needs cash, particularly if it is from a company that is highly sought after for their area of expertise. When things are tight and options limited, you may want to expand your funding search for service providers who could be integral to your company success and present them with an equity position verses paying cash for their services.

In some sense this appears as barter, but it is really an equity deal as the service provider receives an equity position for the service they provide. For this to work, there needs to be incentives built in so the service provider has a real stake in the success of their services, and the receiving company can rest assured they will be a priority to the service company. What a better way for a start up to secure high end services with out having to outlay precious and limited cash.

Valuations can be tricky in determining the equity trade for services but it is doable. Understanding the value of the company from a comparable sale and operational revenue, along with what the services will cost from the service provider, can get you in the ballpark.

Marketing and Advertising can be the mainstay of a company’s success so trading equity for these type of expert providers can be very worthwhile. Make sure you have incentives built into the equity share agreement so the service provider / equity partner has plenty of reason to work hard on your account. For instance, if they meet certain level of sales or increase in sales due to their services, then the equity stake can grow to a predetermined cap. It can be a real win-win for both companies in this uncertain economic time. Consider a relook at your Business Plan to see if trading equity for valuable services makes sense for your business.  

Video Resource: The Angel Funding Market

See this video on Vator.tv »

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19. July 2010 by Frank Goley, Business Consultant for ABC Business Consulting.

Being around experienced entrepreneurs, inventors, angel investors and venture capitalists is key toward developing your Venture Concept. The feedback and experience you can gain is invaluable while providing great networking and pitching opportunities for your venture. Here are some venues and tools to try.

Funding Post

A City by City Venture Capital and Angel Investor Education and Pitch Event. Great for networking, perfecting your pitch and generating interest and referrals.

Vator TV

Puts together a host of competitions for Start Ups to compete for great prizes and receive awesome exposure to VCs and Angel Investors. Opportunities to pitch your opportunity on video and connect online with VC. Lots of discounted and useful services offered.

Ignite

A local forum to pitch your opportunity and network. They video the presentations and put them on their website.

TED X

A spin off of the TED event for local communities. It is a great event to share ideas, network and learn from the best.

Get Exposure and Perfect Your Pitch and Opportunity

Practicing your pitch and receiving feedback on your opportunity is invaluable. Also the exposure you get through these venues and tools is tremendous. Start getting your ideas out there today by looking into these and other idea development and pitching forums.

Video Resource: The Vator Splash Event

See this video on Vator.tv »

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