Friday, April 14, 2017

8 Things You Need to Know About Raising Venture Capital



If your startup is growing, at some point you will likely be seeking venture capital. Unlike angel investors, who typically write checks between $10,000 to $100,000, VCs can write multi-million dollar checks. This means that VCs support startup growth from seed to much later stages.

Because VCs deploy large amounts of capital and expect significant returns, the process of raising money from these so called institutional investors is far from trivial. At Techstars, we spend time with the companies talking about raising money, and in this post I'll discuss some of the things you need to know if you are looking to raise venture capital.

Wednesday, April 5, 2017

What's the Secret to Startup Success? Timing.



Most entrepreneurs have heard the commonly cited statistic that 90 percent of all technology startups (and let’s face it, the majority of modern startups are technology based) fail. Some fail because their products didn’t end up being what they thought it would. Some fail because they ran out of money. Others fail simply because their revenues couldn’t grow fast enough.

But these causes of death don’t exactly illustrate what went wrong for the startup during the course of its life, much in the same way that listing a heart attack as a cause of death doesn’t directly indicate an unhealthy lifestyle that may have led to it. Like with human life, some startup deaths come out of nowhere and can’t be helped, and some are both predictable and preventable.

Thursday, March 30, 2017

5 Tips to Getting an Accurate Valuation



When Brian Duerring decided last fall to pursue venture capital for StreamSpot, a Cincinnati-based start-up that provides automated streaming services to faith-based organizations, he needed to calculate a valuation for his business to effectively negotiate terms with potential investors.

“I knew there was going to be some sort of cap or ceiling, and I felt it would be smart to have that ammunition in my pocket for when that first term sheet came over,” he explains.

To arrive at a figure, Duerring employed various evaluation models, then incorporated the value he assigned to the company’s physical assets and intellectual property. During negotiations, he was pleased to find he did not get much pushback from investors, and StreamSpot, which was founded in 2011 and operates in 40 states and seven countries, closed its first round of seed financing in March.