Maintain your old Siemens Hipath system

Raising Capital in Today?s ?New Economy?

We've helped a number of clients develop business plans and raise capital from "angel" investors, corporate entities and venture capitalists during the last 6-8 years. It's always a daunting process that can be full of pitfalls and require a tremendous amount of work ? but it can be done! Here is some perspective gleaned from years of experience.

The most important rule for raising capital to consider is: it's never easy to raise capital when you need to! Meaning, investors are inherently risk aversive, can be very picky (a real understatement!) and they are looking for the best deal with the greatest upside and minimal risk.

Rule number two ? don't raise capital! Self fund your company (called bootstrapping in entrepreneur-speak) by finding customers that will purchase your products and services. This enables you to involve your most important business asset in your business from day one ? customers!

Rule number three ? use the "FAF" or "VMC" methods. Raise seed (early stage) money from your friends and family and/or if you are really committed, pull some cash from a Visa or MasterCard. These methods can and do work for many entrepreneurs ? be aware it can be very painful on the back end if your company does not make it!

Angel investors can add so much to your company ? they can bring "intelligent capital" to the business. Not only do they invest capital but will very often take an interest in helping you grow the company by taking a Board of Directors seat and/or temporarily assuming a senior management role.

In my experience finding and recruiting a blue chip management team with advanced degrees and a strong corporate pedigree can sometimes kill a startup as quickly as no cash or revenue ? yes, they look great in your business plan and venture capitalists love a "strong team." But, you need "fly by the seat of their pants" manager/leaders who don't need to grind five sets of scenarios (analysis paralysis) before they can take action ? hire entrepreneurial types who've excelled in small companies.

Dealing with venture capitalists can be a significant challenge that is fraught with risk and no upside! Remember, they are highly skilled at the entire process, in most cases they've done it hundreds of times before. So, your on their turf when you step into this arena and you better do your homework properly (market size, revenue projections, cost of sales, marketing plan) and/or consult with a consultant, attorney or "angel investor" who has been through the process before to give you guidance.

Round two in dealing with venture capitalists (assuming you are one of the 1% that submitted a business plan and/or were referred to them by another "VC approved" entity) can also be fraught with risk ? know how to value your company (equity for capital), look at comparable deals in the marketplace and be prepared to negotiate hard and to give up more now than in the last 2-4 years.

Round three in dealing with venture capitalists or corporate investors. Don't (never!) be so desperate for capital that you agree to turn over the reins of the company if you don't meet specific performance milestones based on a first or second round of funding. There are too many variables in the marketplace for you too control and you're taking too much risk for not enough upside. If this is the only way you can raise money from this venture firm or corporate investor then walk away, in the end you will be better off.

Here are some "cliff notes" on how to write a business plan - there is no set formula other than covering the basics about your company; i.e. technology, market analysis, marketing/business development, competitive analysis, management team and a five year set of (detailed by month from startup to year three) financials. The Executive Summary (first 3-5 pages) is the most important, as it is a summary of the entire plan and most investors read this carefully and scan the rest of the business plan.

Don't get caught in the trap of endless rewrites based on investor feedback ? put your plan through one or two reviews by your BOD members and or seasoned execs that will give you honest feedback. Once the plan has been reviewed and approved then go to market with this iteration and stick to it ? investors should be investing in you ultimately, not an artificial business plan that more often than not is out of date by the time you get to market.

Think about how you are going to market your company as you would any other product or service, blending traditional (fax, direct mail) with interactive processes (web site postings, e-mail, etc.). It's a numbers game, you have to aggressively market your company and be prepared to see a return of only 1-3% versus your output ? 1K in direct or opt-in email may only lead to 10-20 casual inquiries, generating 5-7 serious conversations, resulting in 1-3 term sheets (what we will invest for "x" equity) discussions.

Finally, the last and most important rule of all is be tenacious, there is no substitute for absolute commitment to growing your company by raising capital or bootstrapping it! Your vision, guts and passion will very often carry the day when/where others may give up!!

About The Author

Lee Traupel has 20 plus years of business development and marketing experience - he is the founder of Intelective Communications, Inc., http://www.intelective.com, a results-driven marketing services company providing proprietary services to clients encompassing startups to public companies. Lee@intelective.com

Lee@intelective.com

In The News:

North Korea 'agrees to close missile test site'
Wed, 19 Sep 2018 03:55:00 +0100
North Korea dictator Kim Jong Un has vowed to permanently dismantle a missile test site and a launch pad after talks with South Korea.

Merkel removes spy chief to quell racism row
Tue, 18 Sep 2018 21:16:00 +0100
Germany's leader Angela Merkel has removed her spy chief to end a row over immigration which threatened to destroy her fragile coalition.

Brett Kavanaugh accuser 'faces death threats'
Mon, 17 Sep 2018 18:04:00 +0100
A woman who accused US Supreme Court nominee Brett Kavanaugh of sexual assault says she has faced death threats and has called on the FBI to investigate her allegations.

Russia blames Israel after Syria shoots down plane
Tue, 18 Sep 2018 06:27:00 +0100
Russia has blamed Israel and threatened retaliation after one of its military planes was shot down by Syrian missiles in a "friendly-fire" incident.

China retaliates in Trump trade war escalation
Mon, 17 Sep 2018 23:41:00 +0100
China has announced a series of retaliatory tariffs on $60bn (£45.6bn) of US imports after Donald Trump raised the stakes in his trade war with Beijing.



tikatoshop.it

Erfahrungen mit Pallhuber Wein
Agen Bola SBOBET Terpercaya

Travel in comfort and at your leisure with CT Airlink Limousine & Car Service for top quality private transportation and exceptional customer service. We operate Sedans, SUVs & Vans for CT Car Services to covering all Connecticut airports including Car Service from CT to Newark Airport , Mohegan Casino Uncasville CT, Foxwoods Casino Mashantucket CT, Manhattan Cruise Terminal NYC, Brooklyn Cruise Terminal NYC and Bayonne Cruise Terminal NJ. CT Airlink hire licensed and friendly chauffeurs who have in-depth knowledge of the Areas.

Invest To Make Money, Not To Get Rich

The technology boom of the '90s romanticized the "rags-to-riches" ideal... Read More

Success Trading: Some Basic Terminology for New Traders

The world of trading can get very complex because the... Read More

Six Principles of Successful Investing

1. Begin investing immediatelyProcrastination is the number one enemy of... Read More

Sitcom Investing

A fickle stock market encourages good-humored mockery.Recently, as I watched... Read More

Will a Falling Dollar Derail Your Plans for Retirement?

How much are you willing to pay for a tank... Read More

Creating a Financial Future - Putting Your Plan Into Action Part 1

This column has previously discussed "picturing the future that we... Read More

Investing in Car Dealerships: How to Do It Right

The financial characteristics of the automobile dealership are attractive:". .... Read More

Sell Discipline for Investors: Importance and Execution

Investors usually don't have an aversion to buying an asset.... Read More

Gold; What Type of Gold to Buy

JewelryThe advantages are:? Gold Jewelry is the easiest of the... Read More

Commodities - The Next Big Wave of Fortune Building

Have you often wished you could have got in on... Read More

The Convertible Craze Brightens The Future Of Equities

Convertibles are stealing the show with their safe investment image... Read More

Why Should I Use Penny Shares to Build Wealth?

A strategic question. Why indeed?1. A penny share would usually... Read More

Almost Anyone Can Open A Roth IRA!

The Roth is kind of weird until you get used... Read More

Investor Guide to Financial Health

Step 1: Spend less than you earnPerhaps the simplest financial... Read More

What If You Absolutely Positively Could Not Lose - Would You Play the Stock Market?

Seniors on fixed incomes face a unique problem. Where do... Read More

Risk and Reward

If you are doing your own investing in the stock... Read More

Success Trading: More Basic Terminology for New Traders

One important aspect of trading the markets is to understand... Read More

Investment Rowing

You have rowed a boat at some time haven't you?... Read More

Investing and the Fear of Regret and Greed

People tend to feel sorrow and grief after having made... Read More

Easily Finding A Good Stock

There is a tremendous amount of software, complicated high priced... Read More

Press Release Scams and Successes: Reading Between the Lines

Press releases are a means through which companies can keep... Read More

The Perfect Mutual Fund

The Perfect Mutual Fund is the one you build yourself!The... Read More

Critical Investors Business Daily Responsibilities - If not Followed Could Cost You Millions!

When thinking about the investors business daily responsibilities in today’s... Read More

Which IRA Is Best For You?

An Ira is one of the greatest ways to save... Read More

Success Trading for New Traders: What Does Bid and Ask Mean?

Do you ever wonder exactly what's going on in the... Read More