Are you trying to get funding for your startup but are getting nowhere? I'm here to help. Here are the steps you can take that will give you the money you need to start or grow your business.
You’ve got a brilliant idea for your startup. You have already got an initial attraction. You’re sure that it will change the world, or at least your little corner of it.
Now what? If you’re like most startups, coming up with the initial money to get started is daunting—especially if you want to put as much in your pocket as possible.
Now you can turn your idea into the next big thing.
VC Funding Package provides an all-in-one solution to make it easy and affordable for you to start your own company. But VCs are for those startups that not only have initial attraction, but also very solid proof of growth, healthy customer metrics, and in some cases, being profitable.
Even if you are not profitable, you must show consistent growth and how you can return VC money in 10x.
File this one under “D’oh!” It turns out that scaling a startup with a VC is a far, far stronger predictor of success than actually doing a Series A financing. If you’re looking to do your own Series A, you’d better have some serious traction—preferably more than $1.5M ARR in the bank—before you head into the VC world.
Every startup worth its salt wants to raise a Series A round of financing. But before you run off and do one, do a quick health check on your startup, because it turns out that not all startups are created equal.
How startup funding works
Getting to Series A sucks. As a startup founder, you’re building your culture, your product or service, and your team every day. And the work gets tougher as your company grows. But here’s the best news.
If you’re like most entrepreneurs, you want to grow your startup to the point where you can hit your “exit” button.
You might be ready to sell the company before it gets any bigger, or perhaps you want to build a team and approach investors for capital that will enable you to grow much faster than you’ve been able to grow so far.
Angel investments in $1M+ ARR companies average 10X IRR with plenty of exits that are more than 100× to 1. You need to go out there and find VCs that offer angel investment for both accredited and non-accredited investors.
On the other side of the spectrum, angel investors share the risk and reward of angel investing in early-stage startups with the goal of receiving a high return on investment.
You need a minimum amount of startup capital to get your business off the ground. Of course, your needs will be different depending on whether you're starting a business as a side hustle or in partnership with someone.
So the answer to the question "how much startup capital do I need" will depend on your situation... To answer the question, more capital means more risk, but it also means opportunity. Startups are often riskless and highly rewarding careers. The question is not """"how much capital do I need"""", but """"how much risk do I want to take with my time and money"""".
How much startup capital do I need? Learn these rent vs buy rent facts and use that as a starting point to determine how much money you should set aside for your startup. It really is as simple as that. In the startup world, I’ve seen the arguments used both ways by both parties--""""There’s no way I can afford that"""" or """"It’s going to cost far too much."""" I don't get it. I want to live my life how I choose, not what others tell me I should want to be. I don’t need your permission to do anything.
Funding sources for startups
startup capital is a number that represents the total amount of money you will need to start up your new venture, in order to prevent the aforementioned scenario of you sitting on a pile of cash with no way to earn income on it.
If you're planning on starting a business and want to know how much you need, then you need to use an accurate methodology for determining this. What I mean by accurate is that if someone tells you they need $100,000 to start up their business, but actually they need $90 million, then you should believe them and not waste your time trying to recruit people who might be able to help you with your goal, when there are probably plenty of people around who could provide you with what you need right now and for free.
If you’re figuring out how much startup capital you need to get your business off the ground, it can be helpful to think about how much money you could put toward the business if you chose not to start your business. The idea here is to put 20% of your annual income toward your startup costs. That means if you earn $50,000 a year from your day job, then you would need to put $30,000 toward your startup costs each year.
Brainstorm about how much capital you could sacrifice each year if you didn’t start your business.
Understanding the cash needs of your startup is essential, as it will give you a better idea of how much capital you’ll need to raise in order to get your business off the ground. The best way to understand the needed capital for your business is to know what amount you’ll need to sustain yourself and your team while getting the company on its feet. Once you come up with your startup's cash needs, you can explore other options for raising that money from investors or friends and family.
Raising startup capital is a huge undertaking but also one of the most exciting. Entrepreneurs love connecting with other entrepreneurs and potential investors to brainstorm about ways to raise the capital needed to get their business off the ground or expand their business.
The other way of thinking about this is to go from the end game and reverse the process. What is the end game for you or the next revenue target?
If you need to generate $2M in sales next year, what activities needs to be done and how much is the cost of implementing such plan.
This is the money you need to raise.
Start a SaaS startup
How much capital do you need to start a business?
If you’re thinking about starting a business, one simple question to ask yourself is how much money could you save and put toward the startup costs if you chose not to start a business.
It’s helpful to think of how much you can put toward your startup costs as 20% of your income if you could quit your day job.
How much money takes to start a business
If you set aside a little over 20 percent of your income as a baseline, you should have enough money to get your business off the ground every month.
You’ll need to make sacrifices when starting a business. Think about your budget and spend everything you can on your startup costs the first year.
This is a very common question that people ask when they are thinking about starting a business. The answer depends on how much you have already put into the business and how much more you want to put into it. There are two things that you need to consider before you start your own business: the amount of time you want to devote to it and what type of business you want to start.
If you want to start an online store to make a profit, then it may be best to start with as little money as possible. If, however, you want to start a blog so that you can write full time and build up a large list of loyal customers who help pay for your living expenses, then starting with as much money as possible might be the best decision for you.
Starting a business is all about risk.
There is a fundamental limit to how much money you can put into a venture without taking damage. Starting a business with less capital than that limit leaves you open to potential success but also to failure. What “right'' means to you may differ from what it means to others. It’s important to know what the minimum amount of startup capital is for your specific risk tolerance.
For starters, I challenge you to allocate money for product development and MVP if you do not have a tech co-founder.
This maybe around $200 or up to $5,000 depending on the solution you want to implement.
Feel free to reach out to me if you have any questions.