Entrepreneurs Talk about Raising Money

Here are more of their experiences and insights on getting startups funded.

Lower Infrastructure Costs 

With the growing availability of cloud-based computing and services, fewer startups need to spend their money on hardware. “In the early days of Spotify (2006-07),” recalls Enh, “we spent weeks looking at data centers and negotiating with hardware vendors, then finally co-locating. When we started Wrapp five years later, we didn’t need to buy any infrastructure. Higher and higher layers of business service are available in the cloud, so you get more and more stuff without having to buy or do it yourself.”

This has changed seed funding in particular, since startups can lower their initial costs and get products out faster. And for later rounds, notes Reddy, cloud resources make it easier to put up a prototype to show investors.

Changing the VC-entrepreneur balance

Those lower costs can affect the VC-entrepreneur balance, Enh believes. “Large, traditional VCs with hundreds of millions of dollars need a portfolio of about 200 companies to do angel investment properly. Anything that lowers the cost of starting a business may present VCs with the problem of keeping their money active.”

Besides VCs, it’s helpful for the ecosystem to have angels and accelerators willing to invest, says Fears, especially in Latin America where there are fewer institutional investors. “There’s also a growing community of 25- to 30-year-olds,” he adds, “who have had a couple of successful exits and want to invest $50-75,000 in first-time entrepreneurs. Those investors add a lot of value because they are willing to coach and mentor.”

Terms vs. valuation

In the offer, what’s more important for the entrepreneur to examine: terms or valuation?

Of course, the press will focus more on the valuation, but the terms are your agreement with the investors and you’ll have to live with it (and them) a long time.

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The advantages of having a partner for business startups

Two types of business operations in the form of a partnership that has been very popular today. Because if compared to the benefits the business owners who have the sole monopoly on the business owner is one of the shareholders that the difference is quite large. Together with the form of business in the current structure in the economy to facilitate business operations in the latter, more in this era, so you do not really have a chance to see emerging businesses that stem from the same owner, but only a little. The advantages of strategic partnerships with the following.

1. A capital increase.

Fund business is that of matching the story is well known for business. The partners will help business operators are promising to raise capital to expand much more. This is beneficial to invest in things that will not expand branch offices. Funds for the purchase of products. Employs. Working capital in the company. That these issues will have very limited if the company is owned only one shareholder. The financing will be difficult to run than companies that have business partners who share the same management.

  

2. Have an advisor on hand to help.

The assisted forward advice without having to pay employment benefits that the company is a partnership with business over the sole owner. Of course, because it operates in part to be indispensable, although, it is not difficult to see problems in the operation. This is to meet all the experience of business life. Having a good advisor who understands the problems and needs access to the company will help alleviate the burden on the operators to be very they are ready to be behind the scenes who help support the idea of ​​entrepreneurship and ready to be ahead in removing obstacles to encounter problems. It is helpful if businesses will open tremendous business partner with a partner. How bad because two heads are better than one head, lean on dinner.

3. has broad social networking business.

A Financial Advisor Explains How To Increase Your Credit Rating

If you're considering buying a house or taking out a loan next year, you'll want to get your credit rating in the best possible shape. But what's the best way to approach it?

In a Reddit "Ask Me Anything" thread posted earlier this year, an advisor from a major credit card company took dozens of burning personal finance questions from the public, and quite a few concerned how to improve your credit.

The advisor asked to remain anonymous, but Reddit vets all experts before they host an AMA thread. We've also reviewed the responses and found them to be accurate. Here's how the advisor suggests you tackle your credit rating:

Q: What's the best way to increase my credit rating so banks are knocking at my door with awesome offers?

A: Unfortunately, the best answer for this one is always going to be TIME. But there are a lot of factors that you can do that will speed up some of the process. Do not do any balance transfers between your credit cards and stay away from cash advances. Mortgages will always make sure your "debt-to-income" ratio is low. This means that if the amount of debt you have is close to what your annual income is, they will likely reject you.

Q: Does how much credit you have matter as much to potential credit lenders as how well you make payments?

A: Having a card or two with a higher limit is good. But you don't want too much unused credit either. The biggest thing you'll find with loans is that they are looking for HOW MUCH history you have with your current creditors. The longer the better.

Q: Is it better to pay off your entire monthly balance, justthe minimum, or somewhere in between?

Top 5 Tips for Entrepreneurial Success

The people factor appears over and over on my list of top five tips. It is the basis of many entrepreneurial successes and, because many business leaders discount it, innumerable failures.
While the current thinking in business schools holds that all someone with an idea needs to succeed are focus, clarity and a good business plan, I have found that bringing together a great team that’s united by strong motivation, determination and bravery is much more important. Let’s look at how to get started.

1. Find good people.

The successes of Virgin businesses such as Active, Atlantic, Money and Mobile were all based on our assembling a great management team that had a vision, passion and a real sense of ownership.

Specifically, we look for leaders who have the ability to listen to feedback from employees and customers – this is crucial to keeping a service or product fresh and innovative. Often, when things start going wrong, you’ll notice that the staff members feel they are being ignored and good ideas are not bubbling to the top.

Leaders should have the character to make tough decisions and the passion and ability to inspire their staff and carry them through difficult times. Our best CEOs tend to be unconcerned about the size of their office or the thickness of the carpet.

2. Realize that the employees are the business.

A successful business isn’t the product or service it sells, its supply chain or its corporate culture: It is a group of people bound together by a common purpose and vision. In Virgin’s case, we fly the same planes as our competitors and our gyms offer much of the same equipment as other gyms. What separates our businesses from the competition? Our employees.

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5 Reasons a Young Entrepreneur Should Raise Outside Funding

Many entrepreneurs cringe at the idea of seeking outside financing, as a deal will most likely require giving up control and equity. They want keep their business under lock and key and forgo investor scrutinizing their every move.

But there are times when you have to look outside for financing because you’re quickly running out of cash or your goals for your venture’s expansion exceed its capital resources.

If you need to turn to venture capitalists, don't wait until the last minute. Instead, you should start the process of talking to potential capital providers at least six months before you actually need the funds.

Here are five situations when you should kick into capital raising mode:

1. You can't convert users to buyers.

If you are a startup using a freemium model -- one that offers free basic services but requires people to pay for added features -- and you're not getting any conversions, you are going to hit a revenue wall. Depending on the rate at which you are burning through cash, most likely you will need to go outside to raise capital before you run out.

This situation can be tricky, as investors aren't going to want to put their money in a sinking ship. Do not approach those investors until you have a clear idea of how many potential customers might be willing to pay for your product, what price you can charge and the details of the additional features you’ll need to persuade future customers to pay.

2. You lost a big customer.

Big customers can cause big problems when they decide to cut ties with your startup. If your company is getting a big percentage of revenue from one customer and one day they say sayonara, you better act quickly.

When approaching investors, any potential outside capital provider is going to need to understand why you lost the big customer. You'll also need to explain how you are going to use that capital to make your business even bigger and more successful than it was before.

3. You have intense price competition from rivals.

How to Turn Your Million Dollar Idea Into a Startup

Based on my own experience and feedback from friends, every investor is approached by at least ten entrepreneurs with a “hot idea” for a new business, for every one who has a real “plan” for a new business. That’s why I often say that ideas are worth nothing, until they are put in the context of a business plan and real people committed to executing the plan.

In fact, you can find websites full of ideas, like these “Free Innovative Ideas,” by serial entrepreneur Kim E. Lumbard of CalTech. Or you can find books of free ideas, like “Ideas,” by Matt Schoenherr, providing 101 great ideas for increasing your visibility and profitability. Most investors will tell you that they rarely see a new idea that they haven’t heard before.

I’m sure you all realize that there is quite a distance between a good idea and a good business, or even a plan for a business. Here are a few tips on how to bridge the gap. The first step is to pick one idea (idea people find it hard to focus on only one), and go to work along the following lines:

• Do some specific market research. Scan the Internet for existing patents and some “credible unbiased third party” data that confirms there is really a market for a solution resulting from your idea. Just because you or your friends think it is a great idea or great technology, that doesn’t mean that a large number of customers will buy it.

• Make sure the idea is technically viable. I hear many ideas that sound more like dreams, rather than products. It’s not hard to come up with the idea that a cure for cancer would make a great business, but some things are harder than they look. You need some evidence of a real solution before any business plan makes sense.

• Draft a business plan summary. Rather than starting with a full business plan, I recommend that you start with an executive summary of a couple of pages, or an executive level presentation of maybe ten charts. It’s easier to see the big picture, and find out if your strategy can excite people before you work on a detailed plan.

• Prepare 5-year financial projections.

9 unmistakable symptoms of an entrepreneur

In almost every article and story written about entrepreneurship, I have found symptoms and traits which are common among all those who finally made it big.

One of those is that entrepreneurship is not for everyone. I realised that entrepreneurs have some specific traits which should be closely observed.

For example, if you are afraid of failures and adventure, then you should definitely keep out of this.

So, here are nine symptoms that you will definitely find in an entrepreneur.

Absolute hate for the normal and boring

You just cannot accept the status-quo; you hate the normal and boring things in life. You often wonder why a particular area can’t be improved and made more exciting and adventurous.

Bad employee

Just track the job history of any entrepreneur and you will get an idea. Entrepreneurs are generally bad employees, and this is a bitter truth.

Bosses can’t easily manage an entrepreneur, and more often than not, entrepreneurs will quit their job before management decides to fire them.

Famous as a rebel

More often than not, entrepreneurs are rebellious; they cannot follow the existing rules and regulations of the society.

You think that these limitations and rules don’t apply to your domain. Normal human beings follow rules, not entrepreneurs!

Gets bored easily

Steve Jobs dropped out of college because the classes bored him. Bill Gates was always sleeping in his classes, hence he opted out. Entrepreneurs get easily bored, which is considered as a problem by others.

The attention span of a typical entrepreneur is very small.

Detests authority

The norms of society don’t apply to you. As a kid, you must have had problems with your teachers, parents and elders.

Authority is something which you absolutely resist and detest. Possible explanation? Maybe you consider yourself as an authority and master of your own destiny.

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