Friday, June 6, 2008

Thinking of Raising Money for your Startup?


Raising money for your company is brutal. It is time consuming, frustrating and can be a real blow to your ego. And that's if you already know what you're doing. You are dealing with people who invest money for a living. You, on the other hand, have likely never done this before. There is a lot to learn about the process - far more than you can imagine. Don't wait until you need capital to start learning, then it will be too late. You need to being the process of educating yourself now. Here are three resources that I would suggest you go to.

A great place to start is Venture Hacks. Here you will find dozens of articles detailing what you need to know when you begin the process of dealing with venture capitalists. Detailed instructions on how to pitch, how to negotiate, how to build a board. Also invaluable are the sections on the meaning of all those terms in a term sheet and how to get the best deal for you and your company.

Another amazing resource is Ask the VC. This is a Blog run by Brad Feld and Jason Mendelson with The Foundry Group in Boulder, CO. The blog is a running series of questions from entrepreneurs about raising money and forming companies. It is excellent. They also have a full archive of past questions.

It would be great if someone could summarize all of the best practices for raising capital into a book. Well, someone sorta has. Stephen Fleming has taken his series of blog posts on Raising Capital and combined them into a single PDF you can download and print. Even if Stephen wasn't my boss, I'd probably still recommend it.

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