ECC Talk #9 – Getting Funded – Part 1

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You’ve got your idea, your team, you’ve identified customers, validated your models, made your projections….. Now it’s time to get funded!

There are many investment options out there:

  • Venture Capitalists (Investors who require collateral)
  • Angel Investors (Investors who invest in ideas, teams, and typically look for business equity or other ROI)
  • Crowdfunding
  • Businesses investing in technology in thier market stream
  • Friends & Family
  • Many others exist…..

You have the best chance of getting funded if you prepare, prepare, prepare.  There are many resources available to you, such as the Small Business Administration, SCORE, Economic Development Councils, and online tools.  These resources can help you by asking the right questions, providing perspective, and even making connections with investors.

Another avenue for connecting with investors is through a Crowd-funding firm like LocalStake.  LocalStake is a company that takes your business, helps you to refine the pitch, and gets it out in front of a mostly regional (but also nationwide) audience of investors.  The deal has an expiration time to attain funding, and once funding is attained the plan is put into action.

Other investment options are venture capitalists.  As stated earlier, many of these investors require collateral in case the deal goes sour.  Venture capitalists tend to focus on several million dollar investments with fairly mature products, servcies, or technologies with proven business models.  In the start up community venture capitalists exist, but are rare.

The Angel Investors on the other hand are very active in the startup community.  Angel investors have chosen to invest in people, teams, ideas, products, and innovations that have a high-risk and high-payoff potential.  These investors are very savvy individuals, and often bring their skillsets to the table to help fledgling companies succeed.  Angel investors don’t typically require collateral, however many require an equity stake in the business.   Remember though, 20%-40% of a thriving business is far better than 100% of a business that never starts.  Don’t be afraid of equity, just be sure the numbers are right.  These investors are called Angel investors because they take companies based on faith, and they offer their assistance and make connections to help them succeed to get a return on thier investment.

In summary, there are all kinds of investment opportunities out there.  Only 1% of all ventures presented get funded, so make sure to get some fine-tuned expertise to hone your message before the presentation.  Stay active in the startup community and economic development activities to make connections and network……  You’ll be suprised who you meet!