[LRUG] Funding a start-up?

[Abdel A Saleh]

Hi Matt,

Good tips, I especially like the google search for "angel funding
network", it works :-)

Abdel

On 1/11/07, Matthieu Stone <matthieu.stone at gmail.com> wrote:
> Hi Ellie
>
> I've raised VC funding before - a couple of time both here in the UK & in
> the US.
>
> Roughly speaking, if you are going after dot com style VC then these are the
> options.
>
>  Seed capital - upto £75,000
> You savings, family & friends - i.e: Daddy, Grandma, or rich uncle Bill.
>
> Angel funding - upto £300,000 & perhaps £500,000
> Wealth individuals - google search "angel funding network" in your area &
> also leverage any contacts of accountants, lawyers, business owners, or rich
> people that you know.
>
> VC funding - upto £X million
> Organisations that invest in businesses looking for a return. This could
> mean a VC fund, or an existing business that wants to invest in a market.
>
>
> If your serious & are going to approach an Angel network, VC's, or other
> businesses you should prepare what's known as an Information Memorandum
> [known as an IM]
>
> In this you should outline
>
> 1. Your business name & how much you are seeking to raise.
>
> 2. The business opportunity - this is not the technology or cool rails app
> that you've build. But the consumer need/want & the size of the market, &
> how you've reached that conclusion. Also talk about potential competitors
> here.. & show why your solution meets the market needs & they don't.
>
> 3. Describe your solution to the problem, how your solution will meet that
> need/want, and how people will pay you for your product or service.
>
> 4. Describe your team & how they are qualified to build, operate, & sell the
> business
>
> 5. Outline your financials.
>  - How you will use the investment capital
>  - A rough cash flow [showing when money is going out & when money will be
> coming in. No one expects this to be exact.
>  - How the investor will receive a return on their money [ie: profits, trade
> sale, IPO].
>
> Just going through the exercise of the above will give a much better
> understanding of your business proposal, & you won't look like a "rabbit in
> headlights" when someone asks you a question - such as "when will you be
> cash flow positive", or "what ROI can I expect on my investment" - "I don't
> know" is not answer & you will be politely shown the door very quickly.
>
> Some people won't want to know you, others will like you for a bit, then
> decide that its great opportunity but its not right for them. Its a full
> time job looking for the right investor, looking to invest the right amount
> of funds, into your idea and team.
>
> You can engage someone to help you raise the capital, but it will cost you
> either a fixed fee, % of the capital, or some equity.
>
> Once your prepared,  get on the phone & work the contacts like crazy.
>
>
> Having said all that.. ruby & rails allow you to produce a fairly
> sophisticated app very quickly & creative internet marketing is really cheap
> - it just takes time if you've got the skills & the motivation.
>
> I don't know what your doing, but if your aiming at the music or
> entertainment space, I might be able to point you to some useful people.
>
> Good Luck.
>
> rgds,
> - matt.
>
>
>  On 11/01/07, benjohn at fysh.org <benjohn at fysh.org> wrote:
> > > I've a couple of killer Ruby projects in need of some start-up
> > > funding and I don't know where to start looking so if anyone here's
> > > been down this route and can offer any advice I'd love to hear from
> > > you :)
> >
> > My experience is that people fund you when:
> >
> >   1) You are obviously going to succeed anyway because you already are,
> > but they can help you get there a bit quicker, or get up to "the next
> > level", or
> >
> >   2) You're in the right place at the right time and meet the right
> > person with the right connection and right level of drink lubrication,
> > etc.
> >
> > Basically, just do it, as quickly as possible, and get it out there. If
> > it's good, it might do well. If you're anything like me, what you need
> > more than cash is someone else who also thinks the idea is good, and so
> > will keep your enthusiasm topped up.
> >
> > Regards,
> >   Benjohn
> >
> >
> >
> > _______________________________________________
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> > chat at lrug.org
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> >
>
>
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