How to Quickly Raise Seed Capital
Entrepreneurship is like a 25-level computer game. If all that you can think of when it comes to startup financing is “write a business plan and shop it around to strangers,” you’re stuck at the bottom level. There are 24 more levels above you.
Savvy entrepreneurs know how to create startup funding using various tactics. One of the classics entails using what is called “mobilization capital” obtained from the startup’s own customers. In a nutshell, you get your prospective customers or clients to supply you with the capital required for you to then deliver your product or service.
Here’s a story of a how an educational startup funded its launch using this tactic: Continue reading
Google Goes to War With Facebook
The Internet’s gotten rather boring over the past couple of years. For me it’s always been a place to conduct business and research not a place to engage in pointless socializing as the current Social Media phase seems to demand. I have just never been into schmoozing for the sake of schmoozing. So it’s rather nice to see the two 800 lb. gorillas of the Net start to go at it. This should make the Net fun again.
Frankly, I don’t like either one of these giants. It’s not good for small business when Google is so dominant in search. The latest algo modification shifted billions in revenue from one group of sites to another. Imagine if you had been playing by the Google rules for years building up your traffic only to see it collapse over night as a result. That’s what happens when one search engine is so dominant. It makes me long for the 1990s when you had eight or ten search engines to choose from whenever you wanted to do a search. Back then you would use two or three for all important searches to satisfy yourself that you had found what you were looking for. Continue reading
How many companies chasing outside capital actually raise any?
To me this is one of the most fascinating questions you can ask about startup financing. The figure I have been hearing regularly over the past 25 years is that venture capitalists invest in about one in ever 500 companies that approach them for funding. It should be added that venture capitalists rarely invest in startups. They prefer later stage companies which have proven themselves in the market place.
The success rate for startups chasing angel investors is even more difficult to dig up. My best estimate is that with credible ventures the odds could be as good as one in 200 to as low as one in 400. I admit that I’m pulling numbers out of the air here but this estimate is also based on 25 years of experience with startups. Continue reading