Funding a Startup is one of the most challenging aspects of starting a new business. When it comes right down to it you have to navigate venture capital firms, angel investors, and weigh what the capital is worth in loss of control of your own company. Many startups fail because in the early stages of the business they were underfunded in the development stages. Others fail shortly after launch even though they have an amazing product, but they ran out of funds to market the company and gain the critical mass needed to sustain operations. This is a painful thing to hear about because there are simple solutions to obtain Startup Funding and Business Credit to help turn your Startup into a Grownup. We have 3 questions that we would recommend any Startup ask themselves before seeking funding from outside sources.
1) How much money do you really NEED to get your startup off the ground? There is no doubt you are shaking your head at the near absurdity of this question however you would be surprised what you will find out about your business when you look at how lean you truly can run the business in the beginning. So many companies believe they need a huge storefront, high end furnishings, and a full staff the day they open their doors for business. For most this is a good 5 year goal but in the beginning you may be able to do as Apple did and start with an idea and a handful of talented employees. If you have not read Re-Work it wouldn’t be a bad idea to check it out as there are many principles that can save Startups quite a bit of headache in the long run.
2) Are you willing to become an employee at your own company? This too may sound like an odd question but when you decide to work with a VC firm in many cases you will be responsible to the investors in ways you may not have originally anticipated. There are stories from Silicon Valley to Dubai that all start with an enthusiastic entrepreneur and end with a burned out “employee-owner” who is forced to take their startup in a new direction because of the influence of their investors. Entrepreneurs beware.
3) What will happen within the first 90 days of getting the funding you need. There are companies out there that have a minimum $50,000 funding guarantee that makes sure qualified businesses can get access to the funding they need; however it is incredibly important you have a clear vision of what your priorities will be after getting funded. It sounds so simple but many times companies get funded without a prioritized list of necessities; and after getting more than enough funding they find themselves without essentials they should have procured from day one.