by: Todd Nuckols
I know, you thought this blog post was going to be your key to capital. Well, yes and clearly no! First, let's talk about the variety of routes for your startup or growing business to obtain beautiful Benjamins in large quantities. Well feel free to dip your toe in the water and look at these quick options:
Non-profit entity or a personal cause: You are looking at fundraising from individuals and friendly organizations. However, the magic word CROWDFUNDING now comes into play. Sites like Go Fund Me let you get personal. Better yet, local RVA startup Bonfire Funds gives you the chance to give your funders the chance to spread your brand and support your cause with the literal shirt on their back! And finally, if you simply need sponsors, well new sites like Sponsorfied may be able to help.
High growth startup: You have an idea, a dream and a billion-dollar market all planned out then you may need to gather investors by handing out equity in your enterprise. This landscape is literally changing and new resources abound but before all of that you may want to seek wise advise (and that is probably not me)! Seek out this excellent text from the pros Brad Feld and Jason Mendelson in Venture Deals great stuff based on a compilation of blog post and years of experience!
Properly armed you can now consider all kinds of options from local Fundroom (that is right here in RVA baby - nothing like the local touch!) to Angel List and Rock the Post. You may even consider given 804RVA's good friend Matt Rho who works for New Richmond Ventures a shout to get some face-to-face advice. You can find him during Open Office Hours as part of 804RVA's own Startup Concierge. That is free and convenient and he knows investing!
Side note: About that crowdfunding stuff. Equity base crowdfunding does exist but be careful. New rules are being written by the national government right now that is going to change the equity/crowd game. Dramatic opportunity may be just around the corner?
Got a product handy: Well, I am no pro but I think this is where crowdfunding as we know it in the press can be not only a handy marketing tool but a real way to generate funds. Why? Well your funding friends actually get something in the deal - your product. And often for a premium price because they just want to see it come to market. High profile deals on Kickstarter (the king of this space) are literally multi-million (see Pebble Watch).
But in the end, know this about going for the cash. Like you see on Shark Tank, this is built on numbers, reality and (unlike on Shark Tank) often relationships. Go build a business, manage your metrics, and know how and when to ask. Realize that when you take on investors (other than your friends and family) you will have some explaining to do if you don't deliver on your dream! Funding is no small challenge and not to be taken lightly no matter the avenue. Even in crowdfunding, people may just not like your cause, product or mission and leave you short of your goal. It's still hard work no matter how you slice it!