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Showing posts from August, 2015

3 points to keep in mind before pitching to investor

1. Don't offer too much equity, too soon.  Beware of parting with more than one third of your company in the first funding round (called Series A), warns Lori Hoberman, the head of Chadbourne & Parke's emerging companies and venture-capital practice. While you may be tempted to give investors a higher percentage of your company in exchange for more cash, she says don't do it. As your company grows, you may need to raise additional rounds and give away more of your company down the road, so remember to think ahead.  2. Know your numbers.  You are going to have to impress the investors with your backwards-and-forwards knowledge of your financial projections. If you are intimidated by the math, bring an expert in to help you prepare. But when it's time to present to investors, you -- the entrepreneur -- are going to have to talk with confidence about how your company is going to make money, when you will break even, and what your market looks like.  Determ...

HOW A START-UP FUNDING WORKS

First, let’s figure out why we are talking about funding as something you need to do. This is not a given. The opposite of funding is “bootstrapping,” the process of funding a startup through your own savings. There are a few companies that bootstrapped for a while until taking investment, like MailChimp and AirBnB. If you know the basics of how funding works, skim to the end. In this article I am giving the easiest to understand explanation of the process. Let’s start with the basics. affiliate program Every time you get funding, you give up a piece of your company. The more funding you get, the more company you give up. That ‘piece of company’ is ‘equity.’ Everyone you give it to becomes a co-owner of your company. Splitting the Pie The basic idea behind equity is the splitting of a pie. When you start something, your pie is really small. You have a 100% of a really small, bite-size pie. When you take outside investment and your company grows, your pie becomes bigger....

OVERFUNDING KILLS A START-UP

A good business plan was presented to investors. They liked it a lot. They trusted your energy and efforts put in it and promise you initial seed funding. Now that you got some capital you search for a co founder, share the capital with him. He also brings his expertise and  expands your business. Seeing your business grow you get more funding. Then the aim to be an entrepreneur shifts to become a money making machine whose each action is limited to raise some funds. Indians have witness a chain of startups in say any segment you can think of. The startups were accepted by public on account that they were solving there problems, making life simple. So what we have got, a mobile app to order food, look for houses or a piece of land on rent or even a plumber. But the main question is why startups are going in loss? Why do people leave the idea they nurtured as their own kid? I recently went through news of Rahul Yadav EX CEO of Housing.com resigning first and ultimately fire...