The formula for raising money is…
March 22, 2011 § 4 Comments
that there is no formula… If I have learned something about entrepreneurship in the last months, is that there are only opinions and points of view, not general rules or To-Dos. Of course they are principles but this are always context related and at the end all depends on the execution capabilities of the entrepreneurs. Thats how entrepreneurship works. Starting is hard, but once you are in and get to do an startup, raising money for other startups become much easier.
Yesterday we had the successful entrepreneur Jorge Mota(Twitter, LinkedIn) in class as part of the IETECHSTARTUP sessions with Enrique Dans. Jorge shared with us his experience and some basic principles about raising money. I am just naming some few of them:
- Scalability of the business and quality and commitment of management team is key.
- Dont give much of your company at the beginning. Give 30-35% of company in angels round (1-3 mill) and for VC no more than 30% not less of 15%
- Join a startup and learn if you can start your own (remember what we said about the hard that is to start a company?)
- Have ego is good, but not necessarily from the beginning!
- Revenues are not always necessary to raise money!
- Focus on solving a real problem! Develop the process. Then learn to communicate to engineers and finally to customers
They were much interesting stuff Jorge told us, to see some quotes, just follow the twitter hashtag #IETECHSTARTUP.
Again, please note that there is not right or wrong approach for raising money if you are planing a startup. There is also no only one investor type. For you own sake, when raising money, find an investor that you can personaly deal with. Someone that share some kind of values and you will be good to go.
foodieSquare is actually in the raising money process, so, if you know of someone interested on supporting our goal of becoming the European marketplace for high quality artisan food, then let us know!