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
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