Forums: Discussions for entrepreneurs and small business.

In all my recent Googling I`ve become a little confused over the definition of "startup". It seems that to a lot of people a startup has been in business for a few years, has a million dollars or so in revenue, a management team of half a dozen and a corporate box at Fenway!

My startup hasn`t started up yet. I have an idea, a business plan and a passion but other than that I`ve not got much more than a couple of pencils. Its a service business so I have no prototypes and it is, I believe, a unique idea so I can`t even point to an existing competitor as an example of what is possible. Assuming for the moment that my idea is good and my business plan basically sound, do angels invest in real startups?

Thanks for your help
Mitch

Mitch, it sounds like your venture isn’t quite a start-up as of yet.

The term start-up is primarily used for companies that have “started” operations, completed their product or services rollout, and are generating revenues. The primary objective for start-ups is to scale fast and become profitable.

More likely than not, your venture is still in the conceptual or seed stage. This is typically the case when there is little more than the “spark of genius” and the commitment to further explore a market opportunity. This is the earliest development stage in the corporate lifecycle and while investors do occasional provide seed-funding to explore the viability of a concept, it is also the riskiest and hardest to obtain.

Like in most cases when it comes to entrepreneurial finance, the ability to obtain financing hinges to a large degree on the people behind the venture and the merits of their business plan.

I’d be willing to take a look at your business plan to see if I can give you a few additional pointers.

I hope this helps.


Mark




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Jackson Steiner
http://www.JacksonSteiner.com

Advanced Document Design for entrepreneurs, intermediaries, and the financial services industry.
http://www.Publications.FastVentures.com

Mitch,

In the venture capital community, the term "startup" has come to mean the situation that Mark describes in his post. When an Angel Group or "professional" angel says they invest in Startups- that is what they mean.

For situations that are not that far along the path, it is rare that the "professional" angel will invest, so as an earlier stage business, you will probably need to find other avenues. There are a number of ways to bring capital into a business. The Optimum one for you will depend upon your specific circumstances.

If you`d like to discuss your situation (in confidence) send me a PM or contact me directly.

  

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Business Growth Masters, LLC -
Capital Catalysts for Entrepreneurs
Home of the Scalable Business Plan and QuikStart Capital Programs
http://www.bizgrowthmasters.com
info@bizgrowthmasters.com

I do not know much about funding opportunities but I have a venture for you just to see if it works for you.  I am in the business of selling candles and other products.  I can sign anyone up to be on my team, that thinks they would be successful in sales of wonderfully smelling candles.  All they would need each month on the day they choose to recieve their candle package is to start up  49.95 plus tax then you will recieve a website of your own, a candle package with whatever combination you choose from their list, some fliers and books to get you started.  Each month you will have to have 39.95 plus tax every month to recieve your candle package.  Then the key is to advertise your business for fundraisers, home parties which can be held online, and also to create your very own downline of distributors which will help you make a profit.  There is alot of information on my website if you decide to take a gander it will be your decision there is a presentation I suggest you look at as well after you take a tour of the website.   Then this may take money from you every month but you could get the money you need for your main business.  Because everyone loves candles take a peak.  let me know what you think of the website you will have the very same website with your own name that you choose when you send your info in the website is made within an hour of processing your credit card which only the company sees. Any questions just ask.  www.angeli.scent-team.com

I`d like to know more about early stage development from personal stories.  There are some books on the experiences of people who made it big, but I`m more interested in people who tried and failed or barely got by on some lines of credit. 

The best way to find growth capital is to apply to a venture summit where you can speed pitch your ideas to several investors face-to-face in a single day.  One such example is The Speed Venture Summit, the premier speed-dating-style event for fast-growth businesses and investors in New England.  http://www.speedventuresummit.org; and follow the virtual discussion at Twitter #SVSNE

Thanks for the tip. It looks really interesting but it seems from the FAQ that concept stage  companies will not be accepted. Although I may be getting into trouble with terms again - I assume `concept stage` is the same as `seed stage`.

In our terminology, concept stage might be a subset of seed stage companies, but refers to idea for a new company based on a new product, application, market or business model but no milestones reached beyond a rough sketch of the idea--using a possibly apocryphal example from the .dotcom days, perhaps sketched out on the back of a napkin before an investor.

Mitch
I also have a company which is in startup mode. By Start up I mean that we have developed the product (it is web based application) and launched in beta stage in market.
The ideal situation to look for funding is when you have few customers and some revenues , so I am trying to get customers. Revenue I will not get because we are giving the product for free.

I had been to one networking event of angels and VC`s and I realized there is no point in going to them until you have something apart from a business plan which you should be able to show them.
My 2 cents .

It is certainly very difficult to obtain any form of funding or investors unless a business has already got some sort of proven track record or that the business is generating at least some interest and already has what might be called "promises to purchase" or an order book filled.

Hoever all is not lost and just because you have no money there are plenty other things you can do to help get things up and running.

One company that I know of is making changes in the way people do business and promotes the need for a sustainable future. For young start up business who aim to be a sustainable business,charity,non-profit etc they will soon be in a position to offer a variety of grants...usually on a pound for pound match basis. The grants/financial support are for achieving various accreditations, training and educational courses and other things (which are currently being added to).

They also offer start up business that have developed a sustainable business plan the opportunity to generate an income with what they call a "Share Program"...

please email me suejenks@live.co.uk if you wish to find out more