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@Eric: It's far from complete, but I do get a lot of people asking me about raising money. Hopefully this is a starting point, and they can jump off to explore all the other sites I've linked to.
@John: Ha! That's cool. I just started using Track on Twitter myself for other terms. I instantly found something very, very useful.
The first start up I had was financed by bootstrapping and love money. The latter in the form of loans. I failed. Went to work for someone and repaid all the loans. The second time around, I got Angel funding and I succeeded. I however lost the business to the funder.Back in employment I am thinking of starting up again - I am not quite sure yet how I"ll finance it though.
http://www.lovemytool.com/blog/startup-for-less...
--Denny--
So expect to pitch a lot, refine and re-pitch. We met with at least 20-25 different funding sources, then probably did 5-10 second meetings and add another 5-10 to close with our final VC.
I will talk about that in more details at BarCamp Canada, for those interested.
And I'm looking forward to your BarCamp Canada presentation.
@Ben, I already mentioned it in my blog, but 2 thumbs up for you on that one (and all posts as usual!)
Cheers!
And one thing to add - people need to remember that startup sometimes means funding a business longer than initially planned. Long-term plans for money are always better than fast-cash immediate solutions!
Thanks for the link! I'm familiar with Desjardins in your neck of the woods. Who are the other local VCs?
Best,
Matt
Thanks for your excellent VC funding primer. This type of post is right on target for my audience, so I cross-posted on your piece to http://blog.innovators-network.org The Innovators Network is a non-profit dedicated to bringing technology to startups, small businesses, non-profits, venture capitalists and intellectual property experts. Please visit us and help grown our community!
Best wishes for continued success,
Anthony Kuhn
Innovators Network
* Vantage Point Venture Partners
* MSBi
* Garage Technology Ventures
* Ventures West
* Brightspark
* Rho Ventures
* And others.
Some are uniquely Canadian-based (although they all do US investing) and some have US counterparts of some kind.
Check out more here: http://www.quasipreneur.com/
This promoting or marketing stage is where I think a lot of the finance is needed. Many of the most popular "web 2" sites around at the moment have had a big investment near the beginning to get it out to the public and make the site seem busy/populated.
And from how I see it the best chance of getting investment is to have a great idea that really is unique. Then that site naturally becomes the leader in its field, any similar sites built after it are merely in its shadow.
Now, I just need to think of this idea and somehow have the time to build it into a useable product to show off and gain investment from! ;)
And although this doesn't necessarily cost a TON of money it has to be done well, aggressively and constantly.
As for a "super unique idea" being necessary to get funded - I don't think so. You can see plenty of copycat or "me too" companies raising money. There are still sites offering video hosting and sharing getting tons of money with YouTube, Vimeo, blip.tv as competitors. Seems crazy.
The idea is just the start - to get funded you need to show execution, well-thought out plans, a great team, etc.
I was wondering what you think of government-subsidized company startups. North Dakota has a program called Centers of Excellence, in which the state provides startup grants to private sector companies that partner with higher education institutions in the state. The partnership does have to create jobs.
North Dakota also has business incubators located at UND and NDSU, and I believe that at least one of those was a Centers of Excellence project.
If other states have similar programs, I would like to know about them. It's another possible funding option for start-up companies or relocating companies in North Dakota.
There's also a new program called Innovate ND, but I don't know too much about that one or if it helps raise start-up capital.
I don't know anything about the specifics programs you've mentioned, but in Canada and Quebec there are strong Research & Development programs that help technology companies. These have been very good at creating jobs and helping get companies off the ground. The programs are far from perfect, but they do help.
when it is time for you to take a small business finance, you have to know how to calculate your needs.There are several factors that affect the amount of money you need. They are worth discussing one by one.
Great perspective. I actually just started a blog called Capital Chaos (www.capitalchaos.com)which profiles the latest transactions for VC's and the investors in those companies. Should give a very good idea as to what is being invested in and who is investing.
I would love to include your overview if you are cool with it.
I'll be checking out your site. Out of curiosity, how will you differentiate it from the others out there that track VC moves like TechCrunch, VentureBeat, etc.?
Thanks! and hope I send traffic! The big differentiator between our blog and VentureBeat, TechCrunch etc is that we dont just profile the company but the investment as well (and the firms doing the investment). So we will give you a different perspective that should allow other companies/individuals an overview as to who is investing in what and how much. If you were trying to raise money for a software venture, you can see all the latest deals in that space and for how much and by whom. We are not trying to reinvent the wheel but provide greater insight into the deal flow and the metrics behind it. There is an art to raising money and figuring out who is the right person to pitch - hopefully we aid in that information. Check it out and would love your feedback.
Appreciate the feedback and completely agree on look and feel. Working on hiring someone to help out with taht aspect (blog is only 30 days old today...lol).
Regs,
Josh
Would it be possible to see a post about copyrights and stuff? I think that would go well with this post.
Also, please do not use Convertible Debt - its almost never fair to the angels. Here's why http://www.angelblog.net/Convertible_Note.html
Of course entrepreneurs may take advantage through over-valuation from friends & family (without even realizing too) only to get into trouble when they have to raise money the next time. So, as you point out in one of your recent articles, be careful, cause VCs or angel investors coming in next time will de-value the company.
I'm less opposed to the Convertible Debenture structure - everything has pros and cons. I actually think there are some interesting opportunities where you do a Convertible Debenture + Common Shares upfront for the initial investors in the game, which provides a sort of hybrid model. Pricing very early stage companies can be difficult if you're not doing it regularly...
http://www.brainz.org/startup-funding/