Need help on raising a seed round
Hi,
I am co-founder of a tech startup. We are currently looking to raise a seed amount.
We have recently released the beta version and have received good reviews and press coverage ( Mashable etc)
Our problem is that we are located outside US and so fund raising is not so easy. I wanted to know if there are firms which can pitch on our behalf ( on a % commission basis) in the US ?
Where are you headquartered?
Trust me it's not much easier inside the US
Would crowd funding/investing be an option for you? Most developed countries have several active platforms with volumes starting at 50k and up to at times 200k per round (USD/EUR). A few examples:
U.S. / global - kickstarter and many more
Netherlands: - crowdaboutnow
Germany: - companisto - seedmatch - fundsters - innovestment
Several more mentioned here: http://www.ibusinessangel.com/2012/03/crowdfunding-websites/
Nobody will pitch "on your behalf" unless you hire someone that is US based. Even then, VC's/angels/incubators will want to see the CEO/founders present. However, I do believe many VCs/angels would be willing to setup a call with a firm not based in the US as long as the opportunity/business is interesting.
@Edmundo Braverman We are located in India.
@BlackHat Still it is better than India :)
@brutalglide Obviously we are looking to hire someone who will raise the funds for us. I created the thread to check if anyone here can connect us with a firm/person who might be interested in the job. Since we are bootstrapped we can't make upfront payment.
Ease of Raising Capital for Startup (Originally Posted: 11/30/2012)
How much harder is it for startups to gain capital vs. more established private companies? I was reading on a thread earlier about how there is so much capital available in the PE sphere but there is almost nothing in VC these days in comparison. If I wanted to start a sporting good store for example, based on a sound business model similar to Dick's, how difficult would it be to raise capital from a boutique/mm fund?
Also if you're planning on starting it up right after college, how do they evaluate your idea? Is it based on target school, grades, etc like banking or is it a lot more personal where the partners really believe in the idea and trust you to run the business well?
Raising money for a store like you're talking about would be almost impossible. Without some strong traction in your market, you wouldn't get any responses from VCs. PE firms and Growth Equity firms deal with later stage businesses.
It's extraordinarily difficult to get funded with just an idea. It almost always requires some form of traction or prototype.
This. An idea is worthless; it's all about the execution.
Unless you've started a business like this before and succeeded, you're not going to get funding until you show some type of traction.
There's almost no chance a PE fund will give you money for your idea - they deal with later stage companies. With only an idea/business plan, you will likely raise money from friends/family who really really love you, and then from angels, who really really believe in you. A VC will likely not even look at it at this stage.
This isn't to discourage you, however. If you're passionate about your idea, I say go for it.
You have no successful track record. Why would they invest in something like a sporting goods store when there is nothing new or innovative about that and they will barely make any returns considering its retail and expenses are much higher versus some random iOS app that all they have to fund is marketing and pay for people working on it typically
That is not a startup. Margins are too low. Small business =/= startup.
Different options for raising capital? (Originally Posted: 07/04/2012)
Sorry, newbie question.
I know someone who left a small stint at Big3 MBB consulting after just three years, just enough to repay his MBA loan I suppose, to start his own PE gig. He is now helping a small business find its footing.
But when I recently checked if he is helping them change their marketing, sales, customer activity, customer management, or their internal operations, it seems he's doing none of these things.
Which makes me wonder: what really IS he doing that is "PE"? Just investing the money? What else do small PE type guys do?
My guess is he did not personally invest in this business. Are there other ways in which such capital for investment is raised -- via "other people's money" or something?
Thanks for any pointers.
This is all too vague. Helping a small business "find its footing"?
Capital is rising by taking loan and some time when income is high then saving also high so by using savings capital can rise.
VC funding for startups with no previous experience (Originally Posted: 07/02/2014)
My question is whether VC's generally consider funding startups whos founders/management don't have previous startup experience and are a not very far into the process of getting their startup up and running?
This will be a bigger issue than no previous startup experience (assuming you have some other directly relevant experience). If you aren't far along, you should be applying to incubator/accelerator programs. Those won't care about your past experience and are structured for early stage companies. You can also apply to various angel groups. These two paths will start to get you ready for VC funding and will help progress the business.
VCs do not invest in companies that are just a business plan, outside of the very rare exception.
:)
Depends on the fund's strategy, but a lot of the "unicorns" are companies with no plan, no experience, and just a idea with massive potential.
Raising money for a startup (Originally Posted: 07/15/2011)
I'm interested in understanding the rules for raising startup money. Since Dodd-Frank has scrambled some rules, I was wondering the proper procedures for raising cash.
Most small businesses are started with money from friends, family, and fools. If your buddy gives you $10k in exchange for 5% equity, is this illegal if he is not by definition an "accredited investor." How can small businesses startup without these early, almost pre-angel, kinds of investments?
No it's not illegal, your friends or family or whoever really can buy equity in your business in exchange for an investment or in some cases get it for free for consultant type work and guidance they can provide you at the early stages. Apart from these sources, you can also get government or start up grants or investment from early stage or seed capital funds, but you have to have something to show them first, so initially you might need to use your own money if you don't have access to family and friends money.
Taking money from non accredited investors isn't illegal but it may prevent you from being able to register certain securities in the future. Talk to a startup lawyer about this.
Need Advice on Startup Capital (Originally Posted: 12/24/2012)
Everyday, I see horrible ideas get fully funded in silicon valley ( for example I was watching tv the other day and stumbled upon a silicon valley show - I saw an idea that guesses how long you have to live, and this app was able to get seed funded).
Yet, I have been in a bit of struggle to find technology investors who are willing to listen to a pitch.
A little background on team:
The back end engineer has a masters of computer science from an ivy league, with plenty of work experience.
Additional engineer has graduated from top indian tech university in computer science
The front end engineer has over 10 years experience and has worked at a few top tier technology companies (billion plus valuation).
The Idea:
A unique product, with proper funding and a quick entry to the market has the potential to be a billion plus valuation. If you are a technology investor and think this is too optimistic, I looking forward to hearing your reasoning on why.
Where we are:
Fully demoable product, but not quite ready for launch.
Our problem:
My personal network has brought me to wealthy individuals who are willing to invest, but with no technology experience I am very hesitant - timing has become an issue so I am beginning to reconsider. I think our problem is that we are based out of New York City.
Any advice on how to reach out to the right early stage technology investors in NYC or elsewhere?
In advance, I truly appreciate any advice.
There are plenty of VCs in New York. That is not your problem. That said, plenty of VCs won't bite until you've already started moving, i.e. after an angel round or two. Look up groups of Angel Investors in your product area, and get them on board. Otherwise, take the "dumb" money and find mentors who can take the angels' place in advising you as you start.
Shoot me a PM. Would love to hear your idea, and I might have some attractive avenues for funding/growth.
Would be interested to hear more pls. PM me?
Send me over a PM with some more details
How much money do you need?
Realistically, the minimum seed capital we think we need is 250k, but would ideally like to raise more than that for a variety of reasons. If we do an angel round the blocks of capital will likely be in 50k increments. Ideally the demand will push well over the minimum of 250k to give us more flexibility. As of now, we are looking for investors who do not view this round as 'let's give them minimum amount possible to get by on' but instead 'the more we put into this in terms of capital & connections, the more we will get out of it'
I am going to make an effort to send PM's; I am new to the site, and as of now it is saying I do not have enough points.
Start-up funding? (Originally Posted: 11/06/2012)
I currently own a LLC in the United States in New York state, it is a software company that makes custom software for clients. We will be mainly targeting banks, corporations, governments, and hospitals. We are a start up company, we haven't started doing any business currently since it requires money to hire more developers, buy the proper equipment, etc.
Currently my corporation has private stocks that it can sell, but i have heard that you are only allowed to contact friends, family, etc to buy up that stock. The problem is i dont have many contacts who are into stocks, so that option is not available to me.
If someone could give me tips or some advice on what i should do to raise funding for a start-up corporation it would be appreciated.
Should we find a broker who would help my corporation sell its private stocks?
Should we go to a venture capital country and try selling them our business plan? If so, companies based in the US or foreign venture capital companies?
Realistically speaking, unless you have SIGNIFICANT operating experience + strong references, with no revenue/no product and only an idea, you will have close to 0 percent chance of getting venture capital funding. Your best choices are finding angel investors / accelerators / incubators to invest.
Also, you will need to eventually need to change your LLC to a C-corp if you plan on raising institutional capital. Typically LLC's are for small businesses, not start-up companies. Read this article for more details with regards to different entities:
http://www.startupcompanylawyer.com/2009/03/12/what-type-of-entity-shou…
Nobis quis rerum omnis rem fugit harum. Quis vel quam sed aut. Perspiciatis et perferendis cum in. Quam magnam aspernatur occaecati est. Omnis accusamus aut necessitatibus. Qui iure fugit corporis quam.
Doloribus reprehenderit praesentium sunt harum iure cumque. Et est iusto laborum in accusamus. Exercitationem et id deserunt dolorem. Rerum facere accusantium voluptatem totam nihil.
Exercitationem tempore rerum fuga eligendi voluptatem quae sapiente. Quasi inventore nobis quidem eum praesentium et error.
Et et aut vitae suscipit et quasi magni optio. Tempore iusto est labore modi quod cumque id. Optio consequatur quidem vel consequatur non natus. Quibusdam magni tenetur laborum nemo.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Ut labore sed sunt est magni ipsa atque. Molestiae nisi magni corporis qui molestias eum repudiandae velit. Culpa ab dolores dolor natus quaerat non consequatur. Eum voluptas perspiciatis accusantium facilis laboriosam officiis sit beatae.
Accusamus est et ducimus. Omnis in autem quis adipisci aut ut libero nesciunt. Et animi deleniti tenetur tempora. Quia earum et minima similique aspernatur maiores.
Vel aut odit sapiente ducimus rerum rerum. Laudantium ullam delectus quo magni molestiae. Dolore rem quo beatae incidunt consequuntur eos. Ut asperiores vero libero numquam repudiandae. Molestias iste libero quos eius. Architecto occaecati totam molestiae eos quidem.