TLDRIt depends - A ‘good’ investor depends on lots of factors and a good investor for one company might not be a good investor for another.Stage - Does the investor’s average ticket size reflect how much you are trying to raise?Reputation - Is the investor known for
TLDRQuality not quantity - Just because there are thousands of investors out there, does not mean you should reach out to every one of them. You should only need to contact 20-30 investors, maybe a maximum of 50. Build an investor profile - Create the profile of your ideal investor.
TLDRBank loans are one way founders can finance their business without giving up equity. Due to the high risk associated with financing startups, it is more difficult to obtain funding via a bank loan. However, there are various banks that specialise in offering startups loans. Like with all financing options,
Reward-based crowdfunding is likely the most well known form of crowdfunding options where capital is raised from a group of individuals by offering ‘rewards’ for money ‘pledged’ to the company through a crowdfunding platform. If consumers like the idea or product, they can ‘invest’ in the company by providing money
Equity-based crowdfunding enables a large group of individual investors to come together and fund (provide capital) to a business in return for pieces of that business (equity). On most platforms, companies are vetted before being posted for investment and different platforms usually have different requirements for companies looking to raise.
Donation-based crowdfunding offers groups of individuals the opportunity to donate money to causes and projects they care about in order to help such projects succeed. They are typically used for not-for-profit projects, social enterprises, personal causes or community based programmes but can also be used for business projects and startup
Debt-based crowdfunding, also known as crowd-lending or peer-to-peer (P2P) lending, allows a large number of individuals to pool their money together through a platform to invest in a company. Advantages for both companies and individual investors alike are better interest rates. Businesses typically pay the money back at lower interest
A Founder’s Service Agreement (FSA) is a legal contract all founders should sign in the early stages of a company’s formation. It is important Founder’s are in agreement about how they are going to create a company and what the company’s future looks like. Ideally, a
TLDRCrowdfunding is a more recent, but growing, way Founders are raising capital for their startups. There are different types of crowdfunding, which all have their advantages and disadvantages. Founders should research the types of crowdfunding available to determine which best align with their goals and the goals of their company.