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MenuWhere can I start looking for funding for my business?
My business partner and I want to start a not for profit called AssureMom.com I need to know where to start looking for funding. AssureMom.com was formed to assist the elderly and their families with the services they need independent of what Medicare and Medicaid provide.
Answers
The funding of a non-profit can be a bit more complicated than banging on the doors of a bank. First, you will need to set up the corporation, next file for non-profit status with the IRS (1023), and lastly receive tax-exempt status from your state of incorporation. At the point of submission to IRS, you have a window of roughly 2 years to fundraise while you receive your approvals. However, many foundations will not fund you during that time. That leaves you to grass roots funding.
Your success will be based on a solid business plan, and a board that is experienced in oversight. Focus on the income and expenses when you write your business plan.
Good luck in your endeavor, you may find the reward in helping people gets overshadowed by the daunting task of running the company. Keep your mission statement handy!
Sounds like you have a non-profit organization pursuing funding resources that typically revolve around grants, private donors, equity-based investment, product review, membership/subscription revenue, or events sales through the community you are building. A multiple revenue stream approach is a good strategy for a new business that's still trying to determine it's primary funding source. But you need to focus your resources and do what's going to benefit you most to get past the early challenges of your launch. You need an assessment of your opportunity and clear strategy with tactics you can execute. Let's chat.
Related Questions
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What advice would you give for startups who are not based in the U.S but are looking to fundraise there?
My company just went through this. There are several ways you can approach the problem: 1. Find a mentor. Who's the biggest kahuna in your space? Reach out to him or to her. Don't ask for money or intros to VCs. Just pose a good question and start a conversation. Experts love to be heard (how else does Clarity work? :). Use that. If you're interesting and you have a great product, they'll approach you about finding. 2. Attend (and win) some pitch competitions like TC Disrupt. This is a toughie, but if you can cut it there, you can cut it anywhere. Note that good pitches do not necessarily convert to good product (hello, "Yo."). Even if you don't win, some VCs will see you and may approach. 3. Get into an incubator. Y combinator, hub:raum, Wearable World, and do on are all designed to teach you what you need to know to make your next round a success. Find one in the US and get going. Yes, it will cost you a little equity, but it may be worth it in networking and preparation for pitching the US VC market. 3. Pitch somewhere else. Why focus on the US? The VC market there is going to be bone dry in 2016. If you can secure money from anywhere (and you need it) I'd suggest you go and take it now. If you need to raise a round in Q2 2016, good luck to you, because you have a tough row to hoe. 4. PR. If you do an excellent job with PR--especially PR aimed at securing a new investor--you can make good headway in the US. But that will run you ~50k USD to raise 3+ MM USD if you're lucky. Performance can vary wildly. 5. Networking. Hit up the speaking and trade show circuit for your industry and shake enough hands, you'll eventually find a VC. But it's hard going and also super expensive if you're not a US company to travel that much to the US. Hope one or more of these helped. Let me know if you have any follow up questions about, for example, pitching. Which is a whole 'nother ball game. 😊TL
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New York: is it considered a nice gesture to give a branded t-shirt (of an event) to an investor that I'm meeting?
If the investor is spending his precious time meeting with you, then I assume he has at least some interest in your event. If that's the case, then in my opinion, yes it would be a nice gesture and appreciated. Good luck with your pitch!II
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How do founders find the right investors when it comes time to find investment?
This has been discussed many times before and rather than repeating a lot of those things here, I will direct you to one of the best resources on this topic. Clarity CEO Dan Martel recently released a video "Raising Capital Like a Pro" that covers most things you need to know about fund raising. Here is the link: http://youtu.be/7dew9hhWBB4SB
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What is your ultimate source for business research?
In over seven years of SaaS enterprise marketing, I have found Linkedin to be the best source of information for business research in my my industry - particularly competitive research. With Linkedin, I can: - Identify hiring trends – What are your competitors and contemporaries doing as far as personnel? Are they in the middle of a big hiring spree, or are they stagnant? This can offer clues as to how their business is doing, good or bad. A sudden trend in new hires might mean they are expanding. What could this mean? A new outlet, a new product line, a new service, or perhaps just a large increase in demand. Compare this to your own situation to see how you stack up to the competition. - Identify firing trends – On the flip side of personnel analysis, assess competitors’ downsizing trends. If a sudden reduction in employees occurs, this might be a good time for you to leverage your dominance. If your competitor is struggling, it’s time to increase competitive intelligence. All’s fair in love and business. - Identify hiring anomalies - Is your competitor taking on employees with new skills or with skills that seem out of place? This could indicate an expansion, a new service or something else that’s about to happen. With proper competitive intelligence research, perhaps you can figure out what’s going on and determine if it’s something you need to consider for your own business. - Scan competitors’ new connections – Is a competitor beginning to connect with people in a new business sector? If so, this could be an indication of a new project or a new trend. Study the connections to see what they have to offer and try to see where it could fit into your business. Perhaps you too will want to connect to them. - Locate competitors’ previous employees – A few minutes chatting with a competitor’s former employee can gain you tons of valuable information. Are they disgruntled? Perhaps they’ll be willing to let you in on some operational details. In the best situation, perhaps you can pick them up for your team. - Make connections with industry peers – Find LinkedIn professional groups that relate to your business. This allows you to make new business connections. If you run a salon or a spa in Maine, connect with other salon owners in Arizona to share advice. They’re not your competitors so there is nothing to lose by sharing secrets. I hope this helps! :)JR
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Is fundable.com a successful tool to help raise an equity seed round for a pre-launch startup?
We have used Fundable.com successfully for two rounds of financing both oversubscribed. Here is what I can tell you. Basic info: Fundable.com's platform connects accredited investors to startups seeking investment capital. Startups have a public facing profile that includes general information about the companies product, team, press accolade, etc. If you are raising funds claiming SEC Reg D 506(b) the public profile has no information about your securities offering. If an interested investor wants to view more information about your startup and or your offering, he/she would request access to your full profile. The investor must self accredit on the Fundable site before they are allowed to view your non-public profile. The startup is notified and you have the opportunity to conduct some due diligence on the investor (LinkedIn) and elect to invite them into your deal. Your private page includes the offering (terms). All communication from this point is done outside of the platform, meaning you have the investors email address ( a good thing to have). Fundable charges startups a flat monthly fee to post a profile on the site. In addition you can opt for additional services (help) with your campaign. For a flat fee, Fundable will assign resources to help build your profile, consult with you on your raise, and assist with PR or Marketing. This includes a blast to their investor base of over 40K if my memory serves me correctly. I am sure it is higher today. Our experience: For our first round on Fundable, we elected to use the premium service. Fundable did a great job in helping with our profile. We received 50+ views per day (quite often 100+) and on days we were included in their newsletter we received 200+ views. 10 - 20% of views requested access to our full profile. and 10-20% of those responded to my request for a call. Our close rate was very high. Both of our rounds were oversubscribed in less than 4 months taking averaging $50K per investor. These are high quality investors that have not created additional work (outside of normal investor updates). Many of our investors regularly share news and information about our industry. Several have re-invested in subsequent rounds. Disclaimer: Our startup is in the consumer hardware space which I believe tends to attract high net worth individuals. Obviously results may vary, thus I cannot speak to how well a SaaS play would do crowdfunding in general. Fundable.com's premium services offering may have changed since our campaign. I am not affiliated with Fundable.com. In fact we have been successful on other crowdfunding sites as well. In Closing: I am a proponent of crowdfunding in general. It is disrupting angel investing, providing investors with greater deal flow and exposing startups to an exponentially larger audience, increasing their chances to get in front of investors who understand and appreciate that company's solution and opportunity. Most importantly it is moving capital and driving innovation! Keep in mind, securities laws have changed and continue to change due to the Jobs act of 2012. Before you offer any securities to local investors or choose to try crowdfunding, you should consult with an attorney, and take the time to learn and understand what regulations apply to your circumstances.UB
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