Which is the Better Source for Startup Capital?
How to get startup capital.
Every budding start-up comes across the same big question as its revenue starts to grow, “Is it time to seek funding from a Venture Capital Firm?” The answer may vary depending on the type of company and the economic conditions surrounding the forecasted growth of the startup. One aspect that every entrepreneur must do is evaluate whether they actually need VC funding or if they should go after the likes of an angel investor, private equity investor and maybe even a business incubator. In recent times, crowdfunding has been all the talk. After all, why would a company elect to give up a percentage of their company when they can simply give away their product to “investors”. The only reason why crowdfunding has not taken over the venture capital world is because the JOBS Act has not yet been approved. Crowdfunding and Venture Capital funding have their positives and negatives and they must be assessed before considering accepting an offer.
How Do You Do a Valuation for Raising Startup Capital?
Here are a number of ways to come up with a valuation for the the purpose of raising your first round of outside financing. The thing to understand is that there isn’t any one way that everyone agrees on. In reality there are several different valuation methods. On top of that, everyone has their own unique spin on each one.
First things first, understand the meaning of the terms pre-money and post-money valuations. If your startup can justify a valuation of $5 million to investors before they invest, then that is its pre-money valuation. It’s the value the founders have been able to create on their own. If the company is seeking $5 million in startup capital and gets it, then its post-money valuation is the sum of the pre-money valuation plus the cash, or $10 million.
Let’s start off with this short video by a finance prof.
The company ‘As Seen On TV’ to launch crowdfunding platform
This breaking news just in.
As Seen on TV the company behind various products such as Snuggies, Gefilte Fish Snacks, and many more classics launching a new crowdfunding website by Labor Day.
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