Startup Funding Basics


I have been asked a number of times to write about fundraising, especially for startups due to my background being involved for some time in for-profit fundraising globally.  Although the mission of the blog is not so much related to this area I thought I will cover some basics for those of you who want to start and fund their own business, follow their dream and contribute in doing good deeds to society.

At first you start with your idea. Something well thought out. You will definitely need some initial capital either from your own or maybe support from family and friends. Since it might be easier for them to believe in you. If that is not an option, you can turn to angel investors where you would have to pitch your idea.

There are also incubators, companies that will help you in the beginning take the first step by offering you initial funding of support in return for equity.

In addition, private equity companies can get involved if part of their portfolio is to help startups. You would have to research these companies to see their preferred areas of interest. I have to say though it is not easy initially to get their attention. Reason being, they find startups to be risky, as you would probably know.

Now there are exceptions. If they like your idea so much and you have been able to show that you have invested out of your own money 5 to 10% of the capital needed and you have put together a well thought out and delivered business plan with financial projections. Your management team is also very important and should consist of individuals with experience and a proven and successful track-record similar to the business you are starting. You need to have someone on the team who was able to deliver a company from point A to point B.

All these are some of the minimum requirements to have a chance to be considered.

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Posted: June 2, 2014

© 2014 Savas Vikos all rights reserved. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Savas Vikos with appropriate and specific direction to the original content.

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