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Equity Financing FAQs

Crowdfunding, venture capital, angel investing?

Crowdfunding, venture capital, angel investing – there seem to be so many different ways to get funding for my business. Which one is best and are there any downsides to letting other people own a share of my company? Eleanor Lawrie of This is Money replies: You could feel like a kid in a sweet shop when it comes to the different forms of investment on offer for your small business. But while the offer of ‘free money’ may sound tempting, ...

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Frequently Asked Questions about Raising Investment Capital

What Is Investment Capital? Investment capital is money investors, such as venture capitalists and/or business angels, provide companies to help grow or expand their firms. How Will Investment Capital Help My Company? The money can be used to finance the startup of a new company, finance the development of a proposed new product, finance the commercialization of a consumer tested product and finance the acquisition of an existing business. What Does An Investor Want for Providing the Money? Investors are ...

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9 Tips to get funded by Angel Investors

Contents You should create a business plan that emphasizes your sustainable competitive advantage. You should accept the fact that having “a good idea” is often not enough to raise capital from private investors, and you should do your homework to provide “proof of concept” for your venture. You should understand that raising capital requires an expenditure of capital. You should identify and contact angels who are suitable for you. You should recognize that industry experience is valuable and important to ...

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Why Investors Aren’t Calling You Back

Entrepreneurs are constantly befuddled by how an investor would choose one deal over another to review or invest in. The refrain pretty much looks like this: “What?! How can that investor possibly invest in {Insert Undeserving Name} when my company is far more attractive?” The truth is there are lots of potential reasons for these decisions, but it’s important to understand what the landscape looks like, and how your deal stacks up to others. It’s Kind Of like a Dating ...

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Equity Financing Stages for Startups

It is rarely possible for startups to raise sufficient capital to kick-start their operations, launch products and break even. Although a ‘one-time investment’ strategy is theoretically possible, it is hard to cite examples of any successful startup that has gone this route. Moreover, most angel investors and venture capitalists prefer to fund startups in steps. This practice helps investors assess the value of the company and minimize the startup risk. Therefore, entrepreneurs should articulate their investment requirements, while keeping in ...

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How Can I Get Angels To Invest In My Company?

How can I get angels to invest in my company? Angels are private investors who look for promising new companies to invest their money in. Generally they invest in businesses close to where they live and there are many local angel groups in many areas. They are investors with their own money who are looking for promising businesses to help start up for an equity in the business. They usually want to have an exit plan once the company is ...

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10 Questions to Ask Before Accepting an Investment

When to say “no” to investors. You may think that when someone offers you money to fund your startup, you should find a way to take their money. But even more important than landing an investment offer is knowing when to say yes to investors and when to say, “Thanks, but no thanks.” Just because someone has money doesn’t mean they have the knowledge to help you grow your business. And that’s what I mean by “dumb money”—I’m a firm ...

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The 7 key components of a perfect elevator pitch

Whether you are trying to raise money for your business or just want to perfect your business strategy, a solid elevator pitch is an essential tool for achieving your goals. An elevator pitch can be delivered either verbally, ideally in 60 seconds or less, or as a one-page overview of your business. Think of the elevator pitch as an executive summary that provides a quick overview of your business and details why you are going to be successful. Here are ...

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Seeking Investors for your Startups – Points to Note

Seeking Investors for your Startups? Points to Note !! A venture capitalist invests in early to mid-stage companies and startups with the goal of scaling that business and producing a high return on the investment. The biggest risk for venture capital investors is that an investment will flop or even fall into bankruptcy. Many small and emerging businesses fail for various reasons and venture capitalists tend to accept failure as a cost of doing business and look to notch huge ...

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