Welcome to the quick course where the money is, I'm glad you're here because it means you're serious about what it takes to start a real new business. And that you want to know more about how to begin creating a great new business. It also means you're in a hurry. So in this course, I'm going to quickly help you figure out the best source of money to fuel your startup. Let's get going. The challenge is to pick the best source to fuel your startup.
There are many sources for you to choose. Some are right, some are not right for what you're trying to do next. We're going to be able to answer these questions when we're finished with this course. They range from when investors are looking forward to the process of preparing to raise that money and a couple of important ones in between those sources. We'll get at in a lot of detail next, and then we'll show you what distinguishes a good plan that can attract that particular of money. You're going to learn some terms along the way.
They range from angels to CD and more rounds of financing. You'll learn and understand why they are important sources for your company and your original idea. The course is organized into five short sub courses called snippets. The first is what the investors are looking for. And when you know that, then you can dive into the sources of money that we have available in formal venture capital, and other sources, and then conclude with examining the process for preparing to raise real money for a real startup. There are many alternative sources.
When you dive into them, you may be overwhelmed at first We'll show you specifically how to go about picking the best. This is a fast changing world. Startup money alters a great deal and its cost, what the investors are looking for and what might fit. As a result, you've got to keep up with those trends. Some resources are free such as the daily crunchbase daily CBN sites email also sends one out daily with a lot of good statistics. And there's venture pulse daily as well as others.
There are local examples. This is one from New York City. major metropolitan areas around the world. Each have at least one the daily email will get you up to steam and keep you alert to the trends happening in that locale. data sources with statistics start with the professional nationalist venture capital Association. Price Waterhouse does a money tree with a database of financings that you can access for free covering the last three months of financings.
You can sort it by city region, you can sort it by source, which venture firm by name, for instance, as well as what industry CBN sites has a lot of statistics in it as does crunchbase. Take a look. See what works for you. Those trends are important. They come out annually and things such as the National venture capital associations yearbook, and spotting those trends will help you understand when to enter and when not for your startup. Well Let's dive into that first snippet and get going right away know you're in a hurry.
The first snippet is focused on what the investors are looking for. They're looking for an unfair advantage in your company, they can beat the competition. When you can articulate that in 30 seconds, it will lead to success of presentations to potential investors, employees and bloggers, all stakeholders you need to succeed. It all begins by understanding unfair advantage. It's so important that I've done a separate course on unfair advantage at start winning now calm. Many people think this is the hierarchy of what the investors are looking for.
Market is important the idea certainly in management, as well as how they're going to track their money and how they're going to get it exited for investors. And finally, the Fair advantage, this thing that unifies the company's idea to compete. However, in reality, this is the hierarchy. It's sort of like a sandwich management on the top and unfair advantage in the bottom and you've got to have those to hold your story together. Management is at the top and separated from the others because it's so very important. Venture investor after venture investor, serial entrepreneurs will say the same thing.
It's all about people. This is a people decision to invest. How do you know if your plan is a good one? Well, the answer is pretty clear gets the money if it doesn't get the money. Regardless the quality of its graphics, the words and how hard you worked on it. It's not a good business plan.
It has to get the money to be good. It begins by you being able to tell your startup idea quickly and easily. Thoroughly in a way that it tracks stirs the emotions and yes get the money. It's all about storytelling. One of the Great's of the venture world, the founder of Sequoia Capital, Don Valentine, has often said as many venture investors have since the best storytellers get the money. It's not imaginary or fiction, but it's what stirs the emotions.
Its primary focus is tell the investor how you're going to build over time, an unfair competitive advantage in a lucrative new marketplace. Something so competitive, your competition complains, hey, that's unfair. It's about dominating leading to an eventual accomplishment, or the competitive power is so strong people nickname you the gorilla of the new space. The new category. The ant trail to the sugar that is the money is this story along the way, that's what attracts them to it. So being able to articulate it quickly with the elevator pitch in a more broad way, documented in an executive summary, maybe four pages and a final presentation.
That's the deck as it's referred to. Then describe your plan and then getting your money. These people are all interested in the sugar. Each one of them needs to be attracted by it for you to succeed. That's why it's so important. Do you understand what they're looking for?
The typical order of a description a deck is who we are. The customer need an opportunity and your solution and then how you're going to strategically outmaneuver the competition. And over time, three, four or five years with the key miles stones of accomplishment are expected to be. The marketing plan focuses on the customers operations and execution of the plan, including the technology to build an engineer's, you need to do it. And finally, you need some numbers with dollar signs in front of them. That is financial projections.
Plan is all about the story. And it does come in different forms the deck PowerPoint slides, the business model, it's often referred to or business plan, whatever it's written, it includes numbers, graphs and charts. It takes a lot of thinking and talking to do it. And it's frankly a lot of hard work and it's very time consuming. You're going to need these items for building together your arsenal of tools, the weapons you're going to use, the tools you're going to use to articulate your story, the elevator pitch short executive summary, longer the business plan, model documentation even longer. You're certainly going to need a core team of people don't try to raise money alone.
And depending upon your product, or service, the ability to describe how it's going to be sold to customers and so on. That's what idea is all about. The purpose of the plan is to convert a good idea into a financeable business. It's part of a process, multiple stages done over months to reach a final decision by the investor. The core document that is the end point is actually a business plan. But if you can do up fundraising with a quick 32nd elevator pitch, why go through the work of trying to document a plan?
Well, by looking at the model for your business, and how you're going to make money will tell you a lot about the details you need to understand and the investors that are professionals will expect you to be able to answer any and all questions whether it's a my new show item in the cost of goods sold of an part of a product or service cost per customer, or a very broad picture in the marketing communications program, you have to have those answers. And by focusing on preparing a thorough plan, even though you're presented in a shorter deck, you will be very well prepared and increase your chances of getting the money. What is meant by a financeable business? Well, that means that the investors are going to put money and get a return out in the form of cash. They'll target as professional venture capitalists 10 times your money in five years.
We'll talk about many other alternatives that are not expecting that higher return. They want that potential but really don't know how it's going to turn out and that's why they are known for taking very high risk. The goal is to get to the initial public offering, whether it's a snap Facebook or Google, that is the goal. The sale Have the businesses the alternative if you can't get there, but are still a viable business. Companies can buy you out to larger companies are increasingly buying startups before they get too large and unaffordable to be purchased before they go public. Sometimes, if the business is smaller in the market still is good.
But the investors are not interested in something that's small, you can't go public, nobody wants to buy it. Then you can buy out the investors and live off the cash flow. And finally, some ideas whether it's batteries, or semiconductors can be so important to an industry you can license the use of your technology by worldwide corporations and live off a percent of their sales in the form of royalties. There are different ways to give an exit that is cash in the chips. Initial Public Offering is the dream that's the gold medal The purpose of the planet A description of your model is that it goes after exciting the investors. You want to trigger the emotion so they invest in your company.
They don't say yes or no based on the number being 1.62 instead of 1.63. It's an emotional decision. Where do you start with a good idea, then ask investors questions. This is not about operating your company. The operating plan is separate and will change very rapidly every month, you'll have significant alterations to it. This is about what investors want to hear to give you their money.
So get prepared. Look for other quick courses that start when now calm, and you'll be in a superior position to be able to get your money. Well now look at alternative sources of financing for new ventures. Hey, And we'll focus on the informal source first. So, that's where I'm heading now. I look forward to seeing you there.
As we go about focusing on the alternative ideas. Remember, your objective is to pick the best from the many alternatives. I'm looking forward to seeing you there. Bye for now.