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Financing a Startup

How to Finance a Startup

At some stage, most entrepreneurs will need to raise money to fund the continued growth and development of their business.

Financing a startup can be one of the biggest challenges an entrepreneur will face.

Roughly 90% of the startups fail, and a large part of this is due to the inability to raise enough money.

Where to raise money?

Early stage companies

  • Friends and Family
  • Crowdfunding campaigns (Kickstarter)
  • Grants from the government or small business loans
  • Angel investors

More mature companies

  • Venture Capitalists
  • Private Equity
  • IPO (Initial Public Offering)

Funding your startup

Friends and Family → Angel Investors → Venture Capitalists → Banks and IPOs

Fun Facts

Raising money does not necessarily guarantee success.

  • Pets.com raised $82.5 million – Closes after 2 yrs
  • Webvan raised $375 million – Closed after 2 yrs
  • eToys raised $164 million – Closed after 2 yrs
  • Kozmo.com raised $250 million – Closed after 3 yrs

 

 

Good Luck!


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