<![CDATA[The Business Forum - Financing Your Business]]> 2008-01-03T12:21:02Z PunBB http://www.elifelines.org/ <![CDATA[The first investors]]> So much as been written about this topic and you can read many great books on the subject.

A simple chronology might look like this:

1) Months 1-6

who: friends and family
how much: $50-100k
where: out of your house, or a friend's office
what: initial marketing review, initial business plan, a concept device

2) Months 6-12

who: Innovation Works, The Digital Collaborative, The Pittsburgh Lifesciences Greenhouse
how much: $100-250k
where: in anincubator, or a shared office suite
what: first prototype, first patent application

3) Months 12-24

who: Individual Angels, Angel Groups such as Blue Tree and Advanced Global Technologies, Innovation Works, The Digital Collaborative, The Pittsburgh Lifesciences Greenhouse
how much: $500k-1M
where: in your own office space
what: first sales, if you are lucky you will have repeat sales

4) Months 24-48
who: your current investors, your customers or corporate partners, venture capitalists
how much: $2-10M
where: in your own office space
what: a path to positive cash flow

]]> http://www.elifelines.org/user/3/ 2008-01-03T12:21:02Z http://www.elifelines.org/topic/14/the-first-investors/new/posts/ <![CDATA[Your first round of financing]]> I am a big believer in self financing, even if you need outside capital to be very successful.  The first reason is you will get better terms from an outside investor if you can prove your concept with your own money.  Secondly, an outside investor always will feel more confident investing in your business if you have skin in the game as well to lose beyond just your time.  At an Elifelines event held in April of 2005, I believe Glen Meakem used an analogy of walking over glass or something like that and showing total commitment to your company.  A large part of that is putting your own resources at risk.  Also tap friends and family to get initial funding.

]]> http://www.elifelines.org/user/4/ 2006-09-25T01:42:56Z http://www.elifelines.org/topic/22/your-first-round-of-financing/new/posts/ <![CDATA[The Big Questions]]> This is the framework I use to raise money for my company. It may or may not apply to your ideas. This certainly helps in forming and presenting a clear idea of what a company does for a living.

1. What is the product or service?
2. Who is buying it?
3. How big is the market?
4. What is the value proposition for the customer?
5. What are the economics for the company?
6. What is your competitive advantage?
7. Who are the people involved?
8. What is the three to five year projection?
9. How much money has been raised to date and from whom?
10. How much money is being raised?
11. What will be accomplished on this round of financing?

Ideally these questions are answered in a summary of twelve or so  paragraphs (one answer to each question) and one chart (the  projections), captured in two pages or presentation that covers the same issues in fifteen slides.

]]> http://www.elifelines.org/user/3/ 2006-04-02T19:11:50Z http://www.elifelines.org/topic/13/the-big-questions/new/posts/ <![CDATA[You are selling yourself]]> You will hear the following statement from every angel investor you talk to: "I am investing in you, I am not investing in your business".

The most precious product you are selling is yourself: you must maintain the highest levels of ethics, reputation, integrity, and honesty.  It only takes one slipup to land you in the gutter. The investment community is small and everyone knows everyone else, nationwide. You will find that people will cold call you because someone who respects you is passing your name along, because you are respected.

]]> http://www.elifelines.org/user/3/ 2006-04-02T19:10:16Z http://www.elifelines.org/topic/12/you-are-selling-yourself/new/posts/