Finding Funding Fuel for your startup - What you missed on #StartupChats
Last Friday, Managing Partner Mark was part of a panel of experts on the weekly #StartupChat.
Despite technical difficulties due to the now infamous DDOS attack, the chat was a great opportunity to connect with fellow investors and entrepreneurs and discuss the fundamentals of funding for startups.
Here’s a recap of what we chatted about, as well as the answers to a few questions that didn’t make it to Twitter.
Q1. Why is it important for entrepreneurs to diversify their finance streams for their biz?
Q2. What tips do you have for startups using personal savings to finance their startups?
Q3. Friends & family can be a financing option for startups. What advice do you have for bootstrapping?
Q4. Tell us about bank loans/lines of credit: should entrepreneurs take this route? What’re the steps? Risks?
It’s often a good option alongside an equity raise. But entrepreneurs must educate themselves on the risks and rates first.
Q5. Trading Equity: What tips do you have for entrepreneurs to trading equity or services for finance?
Entrepreneurs should compare it to raising cash and paying for the service. It may be cheaper and a good option. Check the small print & keep it simple.
Q6. How can founders negotiate an advance from a strategic partner or customer.
Try offering them a discount or something “special” like exclusivity for a period.
Q7. How can joining an incubator or accelerator contribute to financing your startup?
Cheap rent, free advice, other services such as free internet, dev help. Access to investors and their network.
Q8. What advice do you have for founders looking to solicit angels and VCs to finance their startups?
The best way is to show a committed, experienced & passionate team working on a plan that is easy to explain, with big upside and a short path to exit
It’s also important to do your research and find out what they care about the most - show you’re prepared. We make our investment thesis clear to entrepreneurs and manage expectations far in advance.
Q10. What are other alternative funding vehicles for startups that founders should consider?
A bit of a shameless plug, but we really do believe that hybrid VC/Angel models like brightspark are the best win-win options for investors and founders alike. If you’re curious about our approach, you can learn more here.
Q11. What final piece of advice do you have for entrepreneurs looking to finance their startups?
Startup chats are a great way to connect with the tech community in Canada. To join the conversation, follow #startupchats on Twitter every Friday from noon to 1pm.