Let’s say that you have a brilliant idea about this product of yours. You are receiving many positive reviews and people appreciate your product and are willing to pay for it. Now you are all set to start a company of your dreams and begin your rise to the top of the world.
You have the perfect team that is dedicated to your cause. You have your family’s support and your plan seems to be near-perfect. But how to start???? Where to find the capital?? As most of us might know, a company is like a many-mouthed beast with a monstrous insatiable appetite for money. At initial period it might not seem so, but in the time to come, finance sometimes poses as very hard problems even for the most successful of the companies. So one must have a solid financial backing before going into a venture.
In the earlier times, arranging for money for one’s venture was a back-breaking job. One had to request a plethora of meetings and appointments before finally being able to start. But in the 21st century, this job seems somewhat less harsh. The finances can be arranged in roughly two ways. For the first way, one can always start off their company at its seed stage by bootstrapping. For the people who don’t know what bootstrapping is, it simply means providing for your company on your own. This is often done through loans and personal savings. This works fine when the company is a concept and hasn’t gathered much attention.
Once the company gathers some mass and you are all set to expand your business, you can go to the angel investors. By angel investors, I don’t mean some other Angel Priyas on Facebook. Angel investors are individuals with a considerable amount of brass in their pockets. They can be very helping once they sign in to you company. Along with the finances, they also provide guidance and contacts to other biggies out there. In exchange, you reward them with a fixed percentage of shares or stocks of your company. Once you are doing it big, you need even more for expanding your enterprise or going overseas. Then comes the biggest gamers of the market, the venture capitalists.
These are individuals or firms that have a horde of cash stacked away. They usually provide 7 or 8 figured sums and always need to satisfied with a considerable part of shares of your company. They are also a source of experience and often provide specific advice on almost all matters. The other way is the one that I personally prefer.
This one is more secure and also equally hard to follow. One can always approach a incubator or accelerator at the seed stage of their company. An incubator is a firm that basically provides you with expert advice and monetary backing. Sometimes they even help you set up an ideal team, in case you haven’t got one.
An accelerator often provides you with money only, but sometimes may also help in the other case of management and product development. This way is more preferable than the first way as you always have a helping hand by your side that can help in every way possible, and can almost cover up every problems. They even provide you contacts to bigger players in the game.
But they only provide the help if and only if they see a massive profitability and scalability in your ideas. And unlike the angel investors, you have to present your plan to a panel of judges and experts who have a storehouse of experience when it comes to finance and companies. And its almost impossible to fool them. So one must never show them fake and exaggerated numbers because they know their shit. They have spent the better part of their life making money work for them. But before you go into the game, here is a disclaimer and a small piece of advice.
Managing the finances of a company is a very serious job and demands your entire attention. This game is far more cruel and harsh than a 9-to5 job and can shatter your dreams and burn all your hopes to ashes. Before going to a investor, one must be confident of one’s ideas. Any investor draws the first impression of a potential investment through strength of the conviction of the one presenting it. Then comes the numbers and the basic structure of your business, and finally ends up at the expectations from them. As per the advice, never even try to lie yourself that you can fool an investor to sign in with your project.
Always know when to pull out to avoid a financial crisis, otherwise you might find yourself in front of a big bulging problem. Always trust your team and try to listen before speaking. Take it light and you might find yourself all the dirty sexy money that your venture demands.