Raising Start-Up Funding by Jay Goth

Going into business for yourself is a major step and usually requires some kind of outside funding. Most entrepreneurs will start funding a company themselves, using their own savings or incurring debt. Some forms of debt used to start a company are home equity loans (rare in today’s economic climate) and credit cards.

The next step for many is friends and family. These are the people that know and trust you, and they are more likely to invest in your company than strangers. They also usually require less in the form of documentation and business planning.

At the next level, an entrepreneur will need to have thoroughly analyzed the venture and have developed a business plan that includes a revenue forecast for the next three to five years. Any outside entity considering an investment in a company needs to know several things. First, what is the pain in the market that your company can address? How big is the market you are going after? What is your competition? Do you have any “special sauce” that can’t be easily replicated? How will you bring your company to market? How much will be required to build the company before you can see revenues? Who is going to drive the company? How much have you invested in this yourself?

Once you have answered all of these questions, among others, you can begin searching for additional funds for your company. You need to be careful of how you go about this, as there are legal consequences to raising capital that need to be addressed. The more successful you become, the more important it is to do everything right from the start.

The first step for an entrepreneur should be to visit their local banker. There are programs under the Small Business Administration that offer banks security when making loans to start-ups and small businesses. For some entrepreneurs, Community Development Financial Institutions may be a viable place to get funding. In either case, by going to the local bank you will receive valuable insight into how a potential investor may see your business opportunity. You need objective feedback on your plans, and it’s better to get it from a banker who has seen many business plans and ideas first before going to individuals and equity investing groups.

Most start-ups that have yet to establish a product or service and have limited or zero revenues are too early stage for venture capital groups. However, there are organizations of high net worth (“accredited”) investors who invest in high-risk start-up companies. These are called angel investors, and the groups include Tech Coast Angels, Keiretsu Forum, A Gathering of Angels, and many regional and local angel investing organizations. These groups have regular meetings in which they pre-screen potential investment opportunities and invite the most promising to present to their membership. Depending on the organization, members may invest individually or as a group.

Finally, an entrepreneur should never limit themselves to any one path to finding investors. Networking through business organizations and local social groups and letting people know what you are doing can lead to interested investors finding you. It is never an easy process, but with the right idea, the right team, some good guidance and a touch of luck, you may find the way to fund your business and make an economic impact in your local community.

Jay Goth is a senior business consultant with Tritech Small Business Development Center, an organization that provides business planning and funding advice to high-growth companies in Southern California at no charge. The organization is partially funded by the SBA and has assisted companies in raising over $100 million to date. He also owns a business consulting company, Redtail Capital, and can be reached at jgoth@redtailcapital.com.   Follow Jay on Twitter and Facebook.

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How I “Turn Off” – Top 5 Ways

Jim Estill

Jim Estill is a Partner in Canrock Ventures, an early stage technology venture fund.  He currently sits on the board of directors of RIM (Blackberry) and has done so since before they went public.  He is an active blogger at www.jimestill.com.

I sometimes feel I was there when “always on” and “no downtime” were invented.  I was on the RIM board when they were just bringing out their first Blackberry.  Little did we know then how much it would change our lives.

My leadership style has always been to be accessible and responsive.  This is a self set bar.  I know that I cause my own stress by setting my own always on standards.  And I also pride myself in my work ethic and think people will respect me more if I am quickly responsive.

So for me, not being on causes guilt.  So how do I get over guilt for not being always on?

I study time management (I even wrote a book on the topic – Time Leadership – Using the Secrets of Leadership for Time Management).  What I have learned is we often lead frantic lives chasing the unimportant while not getting to the most important.  So for me, it is about productivity.

One axiom in time management is often the important is not urgent and the unimportant is urgent.  For example, the ring of a phone says to most people “interrupt what you are doing and answer” even if it is a telemarketer.  And the ping or buzz of email calls “look at me”.

Knowing this has helped reduce the guilt (but I still have a bit).  So my top 5 ways to Turn Off are:

1 – Go for a run.  For me not exercising causes more guilt so I figure less guilt is better.  And of course it makes me healthier.  I also find people tend to be forgiving when I tell them I was running.

2 – I set “Focus” periods where I do not look at email.  I find I can accomplish more in a “Focus” period than flitting from email to task.  I started with 25 minute focus periods and even that short of a time helped.  I can now do over an hour without getting tremors.

3 – I list my priorities each night and keep those in front of me.  Nothing like a reminder to keep me on track.  And I remember “the urgent is not always the important”.

4 – I will tell people that I will be unavailable during a certain time.  People understand that.  They put up with it when I am in meetings so why not when I want to be more productive?

5 – Being bombarded by email and phone calls all the time can be a big turn off so sometimes I do the big Turn Off.  Devices have on/off switches – turning them off is acceptable.  Especially important to do this during sleep.

Use logic to prevail over guilt.  Higher productivity is worth it.

By Jim Estill.

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