From the course: Entrepreneurship Foundations

Startup financing models

From the course: Entrepreneurship Foundations

Startup financing models

- There is an American idiom that says the grass is always greener on the other side, which basically means we always think something else will be better than what we have. When I started my company we bootstrapped, which is to say we used our own savings and profits to start and grow. During those early days I would look longingly at other founders who had raised millions of dollars with their impressive offices and ping pong tables and I would be jealous, and say "I want that." On the flip side, they were sitting through long board meetings and fighting investors and would call me and say, "Kim, you are so lucky "you don't have to deal with this." "You get to call all the shots, I'm so jealous." Whether you decide to bootstrap or take outside funding there will be always be pros and cons. There's no right answer on your entrepreneurial journey. However, there are some tips and shortcuts to locating that money in the beginning that I wish someone had told me about. Someone should have stopped me and said, "Kim, for goodness sakes don't reinvent the wheel. "Someone's already done what you're trying to do." So much of entrepreneurship is spent you against the world, trying to figure everything out. And I thought financing would be the same way. My best advice is to find three or four businesses that are similar to the one that you're looking to start, and see how they started. Yes, I am giving you permission to freely copy off someone else's startup financing homework. See how they started their company financially, and see what you can emulate from it. Don't start from scratch, copy and improve on what others have done before you. In addition to copying how they went about financing their company, learn everything you can about the process. I encourage you to use social media sites, LinkedIn, or word of mouth to ask who has raised money in the way that you're looking for. Whether it's pitching your local small business bureau or putting up a crowd funding campaign, or asking friends and family for money, someone has been down this road before. Once you find that person, ask them to coffee, or jump on a quick phone call. Ask them what went wrong, what went right, and what recommendations they have for you. I've done dozens of calls with entrepreneurs who are thinking of going on or applying to the TV show Shark Tank. Because I've walked that road before, I'm able to give them advice and pointers. Once you've learned from those that have been in your shoes it will be much easier to be fully prepared and confident as you dive into your startup finances. I can't stress enough, there is no right or wrong way to raise money for your business. However, copying entrepreneurs who came before you, how they raised their money, who they raised their money from, will be a huge leg up as you start to think about your own path.

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