Loading...
Answers
MenuHow to raise funds for a new startup?
a Latam startup,
supporting small businesses and helping them grow.
Answers
Hi
It really depends on the type of startup, but very generally speaking, you would need:
1. A One Pager and/or Pitch Deck (presentation).
2. To perfect your pitching skills (online).
3. An MVP (Minimal Viable Product) or at least a POC (proof of concept) to show some data/numbers.
As for actual funding channels, you have:
1. Friends and Family.
2. Crowd funding.
3. Angel investors.
4. VC firms.
5. Bootstrapping (funding yourself) - probably less relevant in this case.
6. Government grants (some countries, like Europe)
Good luck
I've successfully helped over 350 entrepreneurs, startups and businesses, and I would be happy to help you. After scheduling a call, please send me some background information so that I can prepare in advance - thus giving you maximum value for your money. Take a look at the great reviews I’ve received: https://clarity.fm/assafben-david
I agree with all the points mentioned by Assaf + accelerators. But that applies as phase 2, only after you have proof of concept/MVP that works/sales page with numbers. To get here use bootstrapping and FFF (family, friends, ‘fools’- which for me means fine acquaintances who believe in entrepreneurship :D)
If Latam stands for Latin America, here is a list of accelerators https://about.crunchbase.com/blog/100-startup-accelerators-around-the-world/#south
Raising Funds for a Start-up business in the global pandemic scenario is really a challenging task. People all over the world are looking for innovative ideas to start their businesses. Let for instance take up the restaurant industries around the globe. In the heat of the pandemic these innovative ideas attract investors for any business be it start-up or not. Specials like Quarantine Kits, Lockdown Lunches, Social Distancing Desserts, and Stay Home Hors D'oeuvres will help distinguish outlook to many restaurants. Prior to COVID-19, purchasing a meal subscription from your favourite restaurant did not even exist as a concept. Now, it is become the latest innovation in a year’s long shift away from tradition restaurant sales towards takeout. Meal donations are becoming more popular as people reckon with how to best support local communities and their favourite restaurants.
Start-up can raise funds in the following ways:
1. Angel Finance: Business angels, either on their own or as part of an angel network or syndicate, provide business funding in return for equity, but can also provide valuable experience and guidance to a growing business.
2. A Start-up-Loan: These are unsecured personal loans of up to £25,000 that must be used for business purposes and a repayable at fixed 6% interest p.a. (Amount may vary from country to country)
3. Bank overdrafts: For companies with fluctuating income, a bank overdraft can provide quick, flexible cashflow. Most major banks charge interest only on the amount you overdraw, and many offer tailored packages for young businesses.
4. Cash advances: Companies such as Worldpay, Business Cash Advance and Credit for Merchants allow businesses to receive money upfront before debts and invoices have been paid.
Under the terms of the agreement, the financier purchases a fixed percentage of your future credit/debit card transactions at a discount, and then advances the cash into your bank account, usually within 10 working days. Repayments will be scheduled at a pre-agreed percentage of every transaction – usually between 10 and 20%.
5. Asset finance: An asset-based loan works the same way as a mortgage. You borrow money against an existing possession, and, if you cannot meet your obligations, the asset is repossessed. Assets which can be used as collateral include property and premises, accounts receivable, inventory and equipment.
6. Factoring: Market Invoice, an online marketplace which allows you to auction your invoice to a community of investors. You receive payment straight away and the investor will receive a profit when the payment finally comes in.
7. Crowdfunding: Crowdfunding is, essentially, an extension of the charity sponsorship page in the business world. People come together, on crowdfunding sites, to pool money towards a venture or idea. Donors or investors on crowdfunding sites, such as Kickstarter or Crowd cube are typically private individuals providing small sums, so they’re unlikely to give you the sort of grilling, and rigorous conditions, an angel investor would.
8. Peer-to-peer loans: A peer-to-peer exchange site, such as Zopa or Funding Circle, will put you in touch with private lenders, and create a personal relationship between you and the lender – fostering trust and patience. Several companies are now well-established in this space, and several offer generous terms.
9. Micro-loans: If you only need an exceedingly small amount of money, you should think about a micro loan, which is tailored to your circumstances and can be used alongside funding from other sources.
10. Community schemes: A plethora of community development finance initiatives, or CDFIs, have been set up around the country to help individuals, and businesses, denied credit by banks and lending companies.
CDFIs provide help with everything from bridging loans and working capital to funds for property and equipment purchase, but their terms are usually
11. Family loans: If you want to keep things ultra-simple, a supportive family member, with money to spare, can provide a fair, willing and reliable source of loan funding. Relatives and loved ones are more likely to trust you with their money than an outsider, and they will probably demand lower interest and fewer incentives than a commercial organisation.
So, these are the ways in which you can raise funds for start-ups and make sure you look innovative so that the investors see you as a rebel in the industry with bright future ahead.
If You do have follow-up Questions, feel free to contact me: https://clarity.fm/joy-brotonath
Here are a number of the strategies that you want to comply with to discern out on how you could raise funds in your business startup:
Create an in-depth business plan
Are seeking for help from buddies and family
Discover an internet organization like us commercial enterprise funding
Mission capitalists: you could also cozy price range from project capitalists
Crowdfunding: Begin a crowdfunding marketing campaign on a crowdfunding platform like Kickstarter or Indiegogo, which are the most popular platforms for elevating funds for any kind of challenge that you'll be having.
You need to analyze where capacity backers are striking out the maximum, is it Kickstarter or Indiegogo? From a standard angle, Kickstarter gets 30million hits a month in comparison to nine million on Indiegogo.
This text has greater statistics on the selection of platforms Kickstarter vs Indiegogo
In recent times you'll find digital advertising companies that provide you crowdfunding advertising and marketing service and assist you with promoting campaigns to reach your investment goals.
I've successfully helped over 150 entrepreneurs, startups, and businesses, and I would be happy to help you. Please send me more information before scheduling a call - so I can give you maximum value for your money. Take a look at the great reviews I’ve received: https://clarity.fm/ripul.chhabra
Related Questions
-
Does anyone know of a good SaaS financial projection template for excel/apple numbers?
Here is a link to a basic model - http://monetizepros.com/tools/template-library/subscription-revenue-model-spreadsheet/ Depending on the purpose of the model you could get much much more elaborate or simpler. This base model will help you to understand size of the prize. But if you want to develop an end to end profitability model (Revenue, Gross Margin, Selling & General Administrative Costs, Taxes) I would suggest working with financial analyst. You biggest drivers (inputs) on a SaaS model will be CAC (Customer Acquisition Cost, Average Selling Price / Monthly Plan Cost, Customer Churn(How many people cancel their plans month to month), & Cost to serve If you can nail down them with solid backup data on your assumption that will make thing a lot simpler. Let me know if you need any help. I spent 7 years at a Fortune 100 company as a Sr. Financial Analyst.BD
-
For every success story in Silicon Valley, how many are there that fail?
It all depends on what one decides to be a definition of a "success story." For some entrepreneurs, it might be getting acqui-hired, for some -- a $10M exit, for some -- a $200M exit, and for others -- an IPO. Based on the numbers I have anecdotally heard in conversations over the last decade or so, VCs fund about 1 in 350 ventures they see, and of all of these funded ventures, only about 1 in 10 become really successful (i.e. have a big exit or a successful IPO.) So you are looking at a 1 in 3500 chance of eventual venture success among all of the companies that try to get VC funding. (To put this number in perspective, US VCs invest in about 3000-3500 companies every year.) In addition, there might be a few others (say, maybe another 1-2 in every 10 companies that get VC investments) that get "decent" exits along the way, and hence could be categorized as somewhat successful depending on, again, how one chooses to define what qualifies as a "success story." Finally, there might also be companies that may never need or get around to seeking VC funding. One can, of course, find holes in the simplifying assumptions I have made here, but it doesn't really matter if that number instead is 1 in 1000 or 1 in 10000. The basic point being made here is just that the odds are heavily stacked against new ventures being successful. But that's also one of the distinguishing characteristics of entrepreneurs -- to go ahead and try to bring their idea to life despite the heavy odds. Sources of some of the numbers: http://www.nvca.org/ http://en.wikipedia.org/wiki/Ven... https://www.pwcmoneytree.com/MTP... http://paulgraham.com/future.html Here are others' calculations of the odds that lead to a similar conclusion: 1.Dear Entrepreneurs: Here's How Bad Your Odds Of Success Are http://www.businessinsider.com/startup-odds-of-success-2013-5 2.Why 99.997% Of Entrepreneurs May Want To Postpone Or Avoid VC -- Even If You Can Get It http://www.forbes.com/sites/dileeprao/2013/07/29/why-99-997-of-entrepreneurs-may-want-to-postpone-or-avoid-vc-even-if-you-can-get-it/MB
-
What is the average cost to close a round of seed funding?
I'm reluctant to say "it depends," but legal expense for a true seed round varies dramatically based on: 1. Whether the investment is structured as a priced equity round vs. convertible debt (or variations on that theme such as "SAFE") 2. Number and location of investors, timing of closing(s), and prior angel investing experience 3. Company counsel's efficiency and fluency in industry norms 4. "Deferred maintenance" necessary in areas like corporate formation, founders' equity issuance and IP assignments. #4 is the item that takes many entrepreneurs by surprise. On the investor side, it leads otherwise very savvy observers to give unrealistically low estimates of legal expense because they assume starting from a clean slate. This item is also most resistant to automation or standardization because startups come into being many different ways; each story is unique. I would put the lowest estimate at around $3K, assuming the company is already formed as a Delaware corporation with clean, basic documents, has issued founders' stock and handled related IP and other matters, and simply needs to issue a convertible note to one or two accredited investors with minimal negotiation of documents. The highest I would expect for a true "seed round" is about $15K, where some corporate cleanup is needed, the deal is structured as a streamlined kind of preferred equity (e.g., Series Seed), there are multiple closings with investors on different dates and terms, etc. Beyond that point we're really in "Series A" territory, doing things like creating a full set of VC preferred stock investment documents (about 100 pages), negotiating with investors' counsel (at the company's expense), and so forth. The expense and complexity of a traditional Series A deal have been the main impetus behind using convertible debt or Series Seed-type documents for seed-stage investments of less than $1 million or so in recent years. I hope this proves helpful. Always happy to chat and answer further questions.AJ
-
What is a good/average conversion rate % for an e-commerce (marketplace model) for customers who add to cart through to purchase order.
There is quite a bit of information available online about eCommerce conversions rates. According to a ton of sources, average visitor-to-sale conversion rates vary from 1-3%. This does not mean the Furniture conversions will be the same. The bigger problem is that visitor-to-sale conversions are not a good data point to use to measure or tune your eCommerce business. All business have some unique friction factors that will affect your final conversion rate. It's very important to understand each of these factors and how to overcome them. The best way to measure and optimize is to take a conversion funnel approach. Once you have defined your funnel you can optimize each conversion rate to better the total effect. For example: Top of the funnel: - All web site visitors, 100,000 / month First conversion: View a product page, 50% of all visitors Second Conversion: Add to Cart, 10% of people who view products Final Conversion: Complete Checkout, 80% of people who put items in a cart In this example we see that only 10% of people who actually view products put them in to a cart, but 80% of those people purchase. If you can figure out why visitors are not adding items to their cart and fix the issue to increase the conversion rate, revenue should increase significantly because of the high checkout rate. You can use free tools like Google Analytics to give you a wealth of information about your site visitor and their behavior or there are some great paid tools as well.DM
-
How much equity should I ask as a C-level executive in a new startup ?
As you may suspect, there really isn't a hard and fast answer. You can review averages to see that a CEO typically becomes a major shareholder in a startup, but your role and renumeration will be based on the perceived value you bring to the organization. You value someone's contribution through equity when you think that they will be able to add long-term benefits, you would prefer that they don't move company part way through the process, and to keep them from being enticed by a better salary (a reason for equity tied to a vesting arrangement). Another reason is when the company doesn't have salary money available but the potential is very strong. In this situation you should be especially diligent in your analysis because you will realize that even the best laid plans sometimes fall completely short. So to get the best mix, you have to be very real about the company's long-term growth potential, your role in achieving it, and the current liquidity necessary to run the operations. It should also be realized that equity needs to be distributed. You cannot distribute 110% and having your cap table recalculated such that your 5% turns into 1% in order to make room for the newly hired head of technology is rather demotivating for the team. Equity should be used to entice a valuable person to join, stay, and contribute. It should not be used in leu of salary that allows an employee to pay their bills. So, like a lot of questions, the answer is really, it depends. Analyzing the true picture of your long-term potential will allow you to more easily determine the correct mix.DH
the startups.com platform
Copyright © 2025 Startups.com. All rights reserved.