We recently caught up with startup investor and influencer, Ben Kepes; Canterbury Angels chairman, Paul Claridge; experienced business banker and financial advisor, Dave Armstrong; and Bridget on the subject of funding.
Here’s their ten takeaways on startup funding:
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Before you even think of external funding, consider simply bootstrapping.
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Fellow well known bootstrappers include GoPro and Atlassian – it ain’t glamorous or fashionable but growing your business through steady customer acquisition and sales revenue ensures a strong value proposition and means you don’t lose equity.
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What is the purpose of the fund raise? Do you need to invest in R&D? Look first at grant options like Callaghan Innovation. Smaller amounts? Consider peer to peer funding or crowdfunding.
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Are you at Early stage? Consider angel investors who will want to see a proven value proposition and at least some early traction. Large amounts? Venture capital often means losing equity and control.
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Think about your exit strategy and how each funding option can impact that strategy.
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Look at the people you are thinking of taking money from – do your due diligence – will they be a strong long term business partners?
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Large amounts? Venture capital often means losing equity and control.
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Raising capital will always take twice as long, will be twice as hard, and will cost twice as much as you expect.
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Don’t raise money too soon – BOOTSTRAP!
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Never raise money under pressure – the time to fundraise is not when you’re on your last month of runway.