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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16 rules of engagement to rocket fuel your start-up’s growth

Here are 16 things that essential if you are going to see your young start-up flourish into a high growth mid-market tiger:







1. Don’t be alone
The experienced, objective and dispassionate adviser / chairman / non-executive director (mentor) can make for a powerful combination with the passionate yet inexperienced entrepreneur who is not always as objective as is required. It’s someone to talk to and vent your frustrations at – safely.

2. Hire a high calibre senior leadership team
You need one of these if you are serious about growth. Too many founders think they can do it virtually by themselves or employ junior managers and expect director level results. Recruit for greatness.

3. Challenge
It is no longer all down to you and if your leadership team is motivated by long term growth in the value of the company then it’s likely they now own part of it too. You have to respect their views and listen to their advice. Expect to be challenged. If you aren’t something is wrong – you have a weak team or you are overbearing. Both are equally dangerous.

4. Learn to lead not manage
This means you have to build a great leadership team and then let them get on with it. Your role as CEO & founder is to provide the direction and uphold the vision and focus – through the ups and downs. Pick the right people and they’ll build a great company for you. Too often, a promising young business is stifled because the founder cannot make the leap from being the nexus of all decisions to leading a team. More of what got you here is not what will get you to where you want to get to. You have to let go and delegate, not over manage.

5. Trust
I trusted my fellow directors 100% that they always had the best interests of Coffee Nation at heart. We had a simple vision and were always aligned. Of course, we didn’t always agree but that is healthy.

6. Style

How can startups collaborate with big corporations?

Going into some form of partnership with a bigger brand can be an enormous opportunity for a startup and take at least some of the heat off when you’re first setting out.

However, the actual partnership deal can itself be strewn with hidden dangers, and the validation, press, prestige and growth you assumed would follow from a successful partnership may not be so immediately forthcoming as you’d imagined. Just getting a foot in the door often takes tremendous amounts of time and effort, and then after the contract is signed the delivery of real, mutual value can also be a challenge.

But partnerships with big brands can and do work well when approached intelligently and with no undue expectations of magical transformations suddenly taking place. Here are a few points to take on board when considering such an arrangement yourself.

Press isn’t everything

Getting the word out about your business does not in itself guarantee success. Increased press coverage can in fact be a mere passing spike, and everyone can cite examples of where massive press launches led to complete failure only months later. Press should be seen as a means to other ends such as fundraising, but going into partnership for this reason alone would not be cost or time-effective, as well as a sad waste of resources that could better be spent elsewhere.

Contact the right advocates

Thoroughly investigate the advocate company’s business goals, mandate and experience of similar projects before committing. Just because a small group of enthusiasts in the organisation have shown an interest doesn’t necessarily mean that the key players are on board, and they are the ones who will ultimately sign off the Det ar enkelt att lara sig spela spelautomater pa natet , och om du ar helt ny som spelare sa kan du valja att spela dina forsta rundor genom att bara satsa pa ett enkelt nummer. deal.

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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?

Restructuring: Do You Need to Restart Your Startup?

You wouldn't start a business if you didn't think it could work.  Yes, entrepreneurs tend to have an outsized sense of the possible, no one would put in the time, money and effort required to start a business without a compelling sense that it could really become a success. Why, then, do so many startups fail?

One big reason is because entrepreneurs aren't known for listening and learning from their mistakes.  When everything seems to be falling down around you, there's a fine line between blindly sticking to your original plan and being open to pausing, analyzing what went wrong, and making course corrections with the benefit of your recent experience and new information.  Ending up on the correct side of this line can be the difference between failure and success.

Mistakes are inevitable, especially in a startup where so many factors must come together simultaneously.  It is almost as inevitable that an entrepreneur will become overextended during the startup phase.  Every entrepreneur has war stories of the chainsaw juggling that's inherent in the first few years of a company's existence.

No Room for Error

Our war story starts when we hit our stride and were maturing as an organization.  We were growing at a rapid clip, were 100 percent staffed with our strategy consulting business, and had just doubled our associate class.  We were fully extended financially and had more than doubled our team; we had no room for error.

Our business can be spikey and, as bad luck would have it, two of our biggest clients had a change in their business that reduced the need for our support.  We had to cut our cost structure fast and deep to get it in line with the new forecasted revenue base.

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15 Creative Ways to Finance Your Small Business

The road to starting a successful business can be a long one, filled with many hurdles and obstacles along the way. And perhaps there is no part of that journey more challenging than finding the right way to fund your business. While the process may sound daunting, there is a light at the end of the tunnel for future business owners, who now have a multitude of ways to finance their business. Here's an overview of some of the traditional and creative financing options available to those thinking of starting their own business.

Small Business Administration loan

The Small Business Administration (SBA) was started in 1953 to encourage aspiring entrepreneurs to start their own businesses. Under the SBA, there are two types of loans that can help prospective borrowers get the capital they need to start their business: a 7(a) guarantee small business loan and the 504 fixed-asset small business finance program.

The 7(a) guarantee loans for small businesses are more common for small businesses. Prospective borrowers can apply for these loans at banks that participate in the SBA loan process. 

"Both programs look for businesses not in the startup phase," said Chuck Evans, co-founder of Prudent Lenders LLC. "They look for businesses two years into the business cycle that are generating cash flow."

These loans have a number of advantages for small businesses.
"The advantage to the borrower is, they have more access to capital," said Evans of the 7(a) guarantee loan. "When borrowing with a loan, collateral or purpose often dictates the terms. If you look at real estate, you are looking at a 20- to 25-year term. If you are financing equipment, you look at the useful life and may finance it for five years. With a guarantee from the SBA, banks can go up to 10 years for working capital, 10 years for equipment and 25 years for real estate. It gives the borrower longer terms and improved cash flow."

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How to avoid the most popular startup mistakes

Learning from other entrepreneurs' mistakes is a great way to minimize what you get wrong.

Learning from other people's mistakes can be a great way to minimize your own.

One of the biggest mistakes an entrepreneur can make is getting caught up in the moment: running with your idea or opportunity and spending time and money on developing it rather than taking a step back and thinking to yourself: "Is my idea really a viable business?"

It is natural when you have an idea, or are presented with a business opportunity, to get excited. It is, however, absolutely vital for you to do your research. Know the market. Do your due diligence. Think carefully before taking the plunge. When I took over Benjys; the high street sandwich chain, I lost £100,000 a week for six months before I had the conviction to shut it down. This was down to me getting too excited by my idea, jumping in without researching whether it was a viable business.

That said, when we first started up Hamilton Bradshaw, we over-analysed one particular deal to death. Six months down the line, we decided not to go ahead with the deal. This deflated morale hugely and, although I knew that it was absolutely the right decision, I could not stop asking myself why it took us so long to reach that conclusion. The answer: we had been so drawn into the detail that we had forgotten to ask the right, simple question - is it a viable business? So when you are doing your research make sure you are asking the right questions from the outset. Don't get bogged down in the details and look at the bigger picture. One of the best pieces of advice I have ever been given is this: if you're going to fail, make sure it happens quickly.

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12 Essential Traits Of Successful Start-up Leaders

From humility to the ability to stay focused anytime, 12 start-up founders share the traits they consider hallmarks of great leadership.


We asked 12 successful founders from the Young Entrepreneur Council which traits they believe--above all others--define great start-up leaders. After all, passion is one thing--but what actually makes a good leader great? Their best answers are below.


1. Flexibility

"No plan survives contact with the enemy." This variation on German Field Marshall Helmuth von Moltke's original quote could not be more true. Leaders of start-ups need to be flexible and be able to alter (or even throw out) plans as their business rolls forward. And they need to be able to do it without getting angry, stressed, or insulted. Emotions like that from a leader crush company morale. --Matt Peters, Pandemic Labs

2. Humility

Whenever the company fails, it should also be the leader's fault. Whenever the company succeeds, it should also be the employees' fault. Your employees are not a vehicle to fund your ego. If you run a company, your employees are now your customers--and your top priority should be to serve their needs, not your own. --Liam Martin, Staff.com

3. Focus