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How do you raise money for start up?
I am doing reserch on how people get funded. I read techcrunch everyday and see companies that raise millions of dollars. I also wonder how there do it. Anyone go thru this process before? Can anyone list step by step on how to raise 1 million dollar?
- russw 18y agoNice question, impossible answer to provide. I have raised capital for a few companies but have found the process different each time. Lets just assume you have a product/service/technology that has a viable market potential. My first step is to define the size of the opportunity and my best path to an "exit". These two components will determine if you begin @ Angel funding, VC funding or personal credit card funding (or Y combinator:)) If you have a big enough opportunity and the connection to go straight to VC, congrats. So now lets assume you don't, and you are seeking Angel money. Here's ONE model...... Get your company as far along as possible without funding, take it to alpha, beta or public launch if you can. Build your advisory board and be very good at tracking your key data points that drive your valuation and prove your business plan. Identify potential funding resources through every means possible. Every major city has an Angel Group it seems now. Reach out and learn what the group has shown interest in and what company's they've invested in. If you think there is a good mix, use every resource the group offers but avoid the pay to share your company models (in my experience that is). Get your pitch down to under 10 minutes, and be unbelievably good at it. Angels tend to like ultra passionate, company consumed entrepreneurs, because thats a consistent trait in successful ones. Pitch, tweak, learn. Repeat process. If you want to see a good video of Tim Draper discussing how to get funded, try this link - http://www.vator.tv/news/show/tim-draper-sings-fundraising-secrets http://www.vator.tv/news/show/tim-draper-sings-fundraising-s...
- xenoterracide 18y agoI like the link.
- babul 18y agoIf you want to raise $1M you need a product people will believe in and see value using. Focus on the product. Build as much of as you can without funding. Then once you have something tangible and working (even in alpha) you can seek out the investors and they may actually be interested.
- xenoterracide 18y agowhat about less... me and my co-founder were talking and we were thinking that really for right now what we'd like is $50-100k between the 2 of us. So we can work on the project full time, relocate, and get any resources that we will need.
- drusenko 18y agoyou can get 50-100k from a few places: either 1 angel (it won't be a very big deal for them), family, or friends of family.
- xenoterracide 18y agodefinitely need to go angel hunting soon. I know in my case family and friends aren't an option. neither have that kind of money (even if I could spread it out I couldn't work 1000 out of them).
- babul 18y agoSame thing applies. Getting funding for two guys and a concept is much harder than two guys and a prototype.
- bigtoga 18y agoI smell a rat. It's pretty common for spammers to create an account on public forums, let it sit for 30-60 days, and then come in and create a generic, link-bait style post which they later use to post links in (once the post has been around a while). The advantage is that Google indexes the page, gives it a high page rank due to the density and good content. I just have a tough time believing that anyone who reads this site and techcrunch would ask such a question.
- youyap 18y agoI actually need help. This is not a spam. click on my user, I have created my account over 2 months ago and never posted yet. I submit my start up to Ycombinator and Techstar this year but didnt get accepted. So I am looking for help. Techcrunch dont teach you how to get funded, there just tell you who get funded. This is why I asked. Sometime question may seem obvious. No matter how much you know, you can always learn more.
- mixmax 18y agoDon't worry - we believe you :-)
- epi0Bauqu 18y agoI believe comments without a certain amount of points have nofollow tags attached to their links.
- rms 18y agolinks in comments are always nofollow
- rms 18y agohttp://www.venturehacks.com http://www.venturehacks.com http://blog.pmarca.com/2007/06/the_truth_about.html http://blog.pmarca.com/2007/06/the_truth_about.html Read venturehacks in its entirety and pmarca's relevant posts.
- russw 18y agoI agree, v-hacks is a very good blog source.