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How to Fund a Startup

How to Fund a Startup
November 2005 Venture funding works like gears. A typical startup goes through several rounds of funding, and at each round you want to take just enough money to reach the speed where you can shift into the next gear. Few startups get it quite right. Many are underfunded. A few are overfunded, which is like trying to start driving in third gear. I think it would help founders to understand funding better—not just the mechanics of it, but what investors are thinking. I don't mean to suggest that our investors were nothing but a drag on us. Apparently our situation was not unusual. Let's start by talking about the five sources of startup funding. Friends and Family A lot of startups get their first funding from friends and family. If your friends or family happen to be rich, the line blurs between them and angel investors. The advantage of raising money from friends and family is that they're easy to find. Of course the odds of any given startup doing an IPO are small. Consulting Better how?

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How Funding Works - Splitting The Equity With Investors - Infographic A hypothetical startup will get about $15,000 from family and friends, about $200,000 from an angel investor three months later, and about $2 Million from a VC another six months later. If all goes well. See how funding works in this infographic: First, let’s figure out why we are talking about funding as something you need to do. This is not a given. The opposite of funding is “bootstrapping,” the process of funding a startup through your own savings.

Angel Resource Institute Topics: Angel Research, Angel Groups, Angel Market Data, Valuation Summary: The 2012 Halo Report is a collaborative project of Angel Resource Institute, Silicon Valley Bank, and CB Insights. The Halo Report provides on-going trends of angel group activities in US companies. ARI (n.d.). 2012haloreportinfographic [Article]. Retrieved from ARI. “2012HaloReportInfographic” ARI. n.d.. Grant-making bodies and charitable trusts - Make Space We aim to make sure that our information about funding is accurate and up to date. However, please do check the situation with the funding organisation too. Garfield Weston Foundation Funding: Majority of grants under £10,000 with grants of up to £250,000 for larger organisations, with some exceptions

The Equity Equation July 2007 An investor wants to give you money for a certain percentage of your startup. Should you take it? You're about to hire your first employee. How much stock should you give him? The million dollar list: New Crowd-sourced list provides details of Israeli Angels Photo Credit: Eden Shochat's Angel list A new list now available online includes the names of more than 100 Israeli investors, and their areas of investment interest The biggest obstacle facing an entrepreneur who’s looking to raise money is getting to the right investor. First they have to find an investor interested in investing in the areas of their project, and second, they have to know how to reach them. Eden Shochat, a serial entrepreneur (face.com sold up and aternity) and veteran investor with experience (Genesis Foundation, Aleph Fund), wants to help entrepreneurs out with an unprecedented initiative that concentrates, on a single document, the names of all the angels investors in Israel, how to contact them and details of the investments which they generally look out for.

10 Reasons To Start Up In The UK The UK is increasingly seen as a hub of entrepreneurship comparable to Silicon Valley or the US East Coast. It’s never been a better time to launch a startup in the UK and here’s why. 1. Corporate careers aren’t what they used to be Imagine embarking on a career at Tesco or Barclay’s in your first year after graduation; it will be years before you’ve risen to a level at which you can claim to own a part of the business. How to Divide Equity to Startup Founders, Advisors, and Employees Since returning from MIT back in June I’ve been focusing on the growth of the company. It has been pretty much on mind non-stop for months now. The part that I’d like to zero in on is when you’ve got a high growth company what are some of the best practices out there to distribute equity to the founders, advisors, and employees? Equity for Founders The Founders’ Pie Calculator by Frank Demmler, an Associate Teaching Professor of Entrepreneurship at the Donald H. Jones Center for Entrepreneurship at the Tepper School of Business at Carnegie Mellon University invented an interesting way to divide equity between founders in a way that is both logical and fair.

The Gust Blog - Thoughts on startups by investors who fund them & entrepreneurs who run them. The two sites you mentioned are both secondary listing services, for later stage companies. For a new angel investor, by far the best thing to do is to join a local angel investor group that belongs to the Angel Capital Association. There are hundreds of them, with at least one in every state. Major metropolitan areas typically have more than one. Finance Wales investing in the growth of Welsh SMEs Finance Wales backs Welsh small and medium-sized businesses (SMEs) with growth finance. We can invest from £1,000 to £2 million at a time and we offer debt (micro loans and loans), mezzanine and equity investments. Finance Wales can also syndicate/co-invest to ensure an SME has the capital it needs. We can also invest at all stages (early stage, development capital, as well as succession and acquisition). Funds we’re investing Finance Wales is currently investing 7 funds in Wales (6 for businesses):

Swapping start-up equity for professional services What happens when you gives shares to another business? Back in the halcyon days of the dotcom boom, a nice little trend evolved that cut through the airy, overinflated fads of the day. Start-ups reluctant or unable to sell great slabs of their equity to drooling VCs instead gave shares to businesses who could actually help them grow, in return for that company's services. What usually happened was some creative spark with a big idea for a website gave shares to a development business. And the development team would work hard to build a top-notch site in the hope it would pump up the value of their shares. Things worked out pretty nicely for both parties: the business founder didn't have to spend a dime, the development company got a good chunk of equity in a potential next-big-thing.

Startup Data: 4 Strategies Changing the Speed & Size of Your Series A Remmember that it’s best to explicitly define what the fundraising milestone strategy is during the seed stage Once a startup has raised seed capital, plenty of theories and advice exist on how to successfully raise a Series A. Recently, we looked at our own portfolio at NextView Ventures to dig a little deeper on how startups actually raise that next round of financing. It’s been four years since we founded NextView Ventures, so we’re now at a critical mass of startups that have accomplished this Series A milestone. Of the NextView-backed founders that have tried to raise this round, over 70% have done so (compared to a mean success rate in the industry of around 27%, according to some sources). Given this volume, we can now draw several insights from which others might learn.

Guardian Sustainable Business The sales of these businesses have certainly generated rich financial rewards for the entrepreneurs that founded them but have done little to further the social missions of those businesses. The argument that somehow the positive values and social intent of these companies percolates through the multinationals that bought them is nonsense akin to trickle down economics. It also ignores the fact that these social businesses were acquired for commercial reasons and for their potential to generate significant profits into the future. Multinationals view "organic" and "ethical" companies like any market innovation or new technology that has the potential to make money.

Wiki Equity agreements are used to legally detail how equity will be divided amongst founders, key employees, advisors and investors in a startup company. The details of equity agreements will specifically determine who gets what payoff should the company be acquired or go public. Additionally, since equity often takes a role in determining voting rights and other key decision making, these aspects and how they relate to the equity division are described in equity agreements. Thus, it is very important for entrepreneurs and people looking to work at startups to understand equity agreements in detail, so that they can know where they stand on potential payoff and decision making in their company. Equity agreements can be divided into those between founders, those between the company and employees and those between the company and investors. Before going into these types of equity agreements, it is important to understand key concepts and terms used in equity agreements.

this is the BEST and most complete article I have found so far... by maudpasturaud Mar 16

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