The Seed Capital for Startups Blog

How to Use Creative Financing to Start Your Business

Free Mini-Course in Creative Financing for Startup Entrepreneurs

Are you an Entrepreneurial Champ or Chump? Find out.

Champs are the ones who understand how entrepreneurial finance works. Chumps are those who sit around hoping that some kind stranger will give them money after reading their business plan. When it doesn't happen, they complain about investors being "too stupid." You can increase your chances of being successful in attracting capital down the road if you learn how savvy entrepreneurs are always moving their companies forward.

You can subscribe for free here: Send Me Creative Startup Financing Mini Course Right Now!

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The Guerrilla Startups Guide is Here!

Need Seed Capital?

It's here! Finally. You can finance the launch of almost any startup provided that you understand that it's about financing the assets that you need to operate.

Discover how to cashflow engineer any startup into business.

The Guerrilla Startups Guide is Coming!

Guerrilla Startups Guide is Coming

The ultimate how to finance any startup guide is coming.

The Men Who Built America

If you haven't already heard the rave reviews of the new History Channel series The Men Who Built America go check it out. Each of the 2 hour segments covers the first wave of tycoons in America starting with Cornelius Vanderbilt and moving onto to John D. Rockefeller, Andrew Carnegie, and J.P. Morgan.

The Men Who Built America

From left to right: Carnegie, Rockefeller, Vanderbilt, Morgan

You can read more about The Men Who Built America here.

Revenue-Based Financing

The new Revenue Royalty Certificate product showing you everything you need to know to close investors is out. Get them at the special price while they last.

How Deal-makers Close Investors

 

 

Startup Tricks Used By Savvy Entrepreneurs

Why do some startups pull ahead quickly and leave their competitors eating dust? Find out how and why.

Entrepreneurial Tricks of the Trade: Fake it Till You Make it

Growth Strategies for Business

The first ever growth through through acquisitions course for entrepreneurs. Learn from the very best: the tycoons who did it.

Small Business Growth

Small Business Growth:  How is it done?

If you have ever wondered how to grow a small business more aggresively, wonder no more. Here's a free series on how on sophisticated entrepreneurs and managers do it.

Small business growth.

Revenue-based Financing: How to Use it to Fund Your Startup

Revenue-based Financing Can Be Used for Startups

Find out how you can use revenue royalty certificates to close nervous investors and finally launch your startup.

Find out more at Revenue-based Financing for Startups

Using Crowd Funding for Startup Capital

How to Finance Your Startup With Crowd Funding

There's an interesting story here on how to combine creative financing with crowd funding to get the startup capital needed to launch.

If you're looking at small amounts of capital, this is a route well worth exploring.

The Wall Street Journal has covered crowd funding.

Get Free Marketing Classics from Jay Abraham

Get Two Free Jay Abraham books

As you probably know already, Jay Abraham is one of the great marketing wizards of the age. Today he is allowing me to share free copies of two of his books with you. You can download them instantly.

So, here are the links for the pdf copies:

Getting Everything You Can Out of All You've Got

The Sticking Point

There's absolutely no catch.

Enjoy.

Best Business Plan Software: What business plan writing software do you recommend?

What is the best business plan writing software?

If you have used business plan writing software, what would you recommend? Here's a list of the top business plan software programs:

Create your free online surveys with SurveyMonkey, the world's leading questionnaire tool.

Feel free to add your comments below.

Startup Financing: How to Start a Company With No Money

How to Start a Company Without Any Money

I first heard about John Paul DeJoria back in the mid 1980 and have followed his career on and off ever since. Here's a man who belonged to an L.A. gang member in his youth and was at one point homeless. Today he's a billionaire. This is a video worth watching because Paul explains how he started his company without any money. He exemplifies what the Smart Startup Guide is all about.

John Paul DeJoria: 2011 Entrepreneurship Conference Keynote

Raising Startup Capital: How to Build a Great Pitchdeck

Using Pitchdecks to Raise Capital

When attempting to raise capital from either angel investors or a venture capital firm, it helps to have a short clear and concise pitchdeck to use. Here are a few examples of pitchdecks.

Mint Founder Institute Accounting

View more presentations from Andrei Marinescu

Mint.com Pre-Launch Pitch Deck

View more presentations from Hiten Shah

2010 01 27 The Lean Startup Twiistup

View more presentations from Eric Ries

 

Revenue Participation Financing: The Decades Old "New" Startup Financing Technique

Revenue Participation Financing for Startups and Growing Small Businesses

Since I  first discovered revenue-based (aka Revenue Royalty Certificates) back in the mid-1980s (yes, 1980s), it's surprising to hear people now talking about it as if it was something new.  Here's just the latest piece thrown onto the pile.

"Royalty Financing": The New, New Thing in Venture Capital

Basically, the idea is this: Someone lends you money (in this case, $100,000), but instead of a fixed interest rate, you agree to pay the lender a percentage of your gross sales (not net profits) each month -- 2 percent to 6 percent is customary. The royalty payments may continue for a specified time period (generally three to five years) or until the lender has received all of their money back plus a 20 percent return on their investment (in this case, $120,000 in total payout). Once the time period expires or the desired return has been achieved, the loan is considered fully paid, and you stop making the royalty payments each month. (Source)

...

So where do you find royalty investors? A number of firms are setting up venture funds built entirely around the royalty financing concept. Among those are Arctaris Capital Partners, LP in Waltham, Mass. (www.arctaris.com); Cypress Growth Capital LLC in Dallas (www.cypressgrowthcapital.com); Revenue Loan LLC in Seattle (www.revenueloan.com); and Noventi Ventures in Menlo Park, Calif. (www.noventivc.com).

Before you get overly-excited understand that these firms only lend to companies with reliable existing revenues not startups. However, it is possible if you have a strong team to find individuals to back you using Revenue Royalty Certificates. In the case of startups, there is normally a moratorium of 6 to 12 months on payments to allow the company time to achieve traction. To find out how you can pitch an RRC to angel investors and set one up, click here: How Deal-makers Close Angel Investors.

Best Games: Boccee Ball is the New and Better Angry Birds

If you're starting to tire of Angry Birds, check out the newest hit game: Boccee Balls

Looks like another hit from the team at playscreen.

 

 

<--  Click to embiggen.

Lean Startup Advice: Are You Iterating?

How to be a Lean Startup: Iterating & Pivoting

I don't know how Paul Graham stands it. He must hear these words a hundred times a day.

Warning: This will be an NSFW video in some offices due to salty language.

Startup Capital: What Are Your Odds of Attracting Angel Investors?

What are your odds of attracting startup capital from angel investors?

Better sit down first.

Ok, are you ready?

According to AngelSoft:

... only 51 companies out of 20,395 that were processed through their system over the last 12 months received funding. The odds of writing a New York Times Best Seller are greater than the odds of getting funded by an angel!

Even though I have been writing about this problem since 1995, I had no idea that the odds could be so poor. The typical numbers are one out of every 500 companies applying for venture capital gets any and perhaps one in every 200. The Angelsoft numbers translate to one in 400.

That's why it's called the Financing Valley of Death. Investors want entrepreneurs to prove their mettle by surviving it before any checks are written.

Don't kid yourself about business plans, Powerpoints, and elevator pitches eliminating this test.

They won't.

Free Angel Investor Directories and Lists

Why pay for directories and lists of angel investors when you can access them for free?

The Ultimate Free Angel Investor Group Directory.

How to Find Free Angel Investor Directories and Lists

If you're looking for lists of angel investor groups and networks to connect with, check out the biggest and totally free lists on the Internets:

Free Angel Investor Lists.

Word to the wise, don't destroy your chances of raising money by making the common mistakes of first-time capital seekers.

 

 

The 3 Big Deal-Killers That Scare Off Your Angel Investor(s)

A revenue-based financing instrument called a Revenue Royalty Certificate.

I'll gladly pay you Tuesday for a hamburger today. - Wimpy

The above quote sums up in one line what most first time capital seekers sound like to angel investors.  I say this because the number one concern of investors is the preservation of their capital which includes the ability to extricate it from the company within a reasonable amount of time.

When the investor asks what sort of liquidity event the entrepreneur plans to create for this purpose and when, the answer is invariably vague. "Oh well, if everything goes perfectly we will IPO in a few years or be acquired by a big company." That folks is as confidence inspiring as Wimpy's famous offer. Investors require a minimal level of certainty. Vague answers only scare them off. That is the first big deal-killer.

The second deal killer is an inability to agree on a valution. The entrepreneur needs $500K and is offering 20% of the company for it. That's only fair, right? The angel wants 51% because of the high level of perceived risk. The chasm between the two valuations is in most cases too wide to bridge.

The third big deal-killer is over how any potential profits may be split if they do occur. Since the startup will be a private company initially the founders will want to minimize taxable income via the standard ways. This usually means that nothing is left over to share with the passive investors. Considering that his money could be tied up for five or more years without any return, can you blame the investor for not being excited enough to write a check?

Is there a solution? Is there a way to eliminate these three deal-killers? The answer is yes. It's done by using a revenue-based financing instrument called a Revenue Royalty Certificate.

Find out more about this amazing yet still little know tool which was recently written up in the WSJ: An Alternative Financing Option for Start-ups: Entrepreneurs Going the Revenue Royalty Route Use a Share of Revenue to Pay Back Loans

Get the details here on how to successfully use Revenue-Based Financing.