Questions

Launched marketplace for diving experiences, still haven't secured a seed round and running out of money. What should we do? My wife and I have been working full time on this for 6 months and spent most of our accessible savings on the startup. We still don't have more than a handful of bookings and we started raising money a bit late (only 1 month ago). Should we get a job and continue looking for funding? Should we shut down? Other options?

When an entrepreneur has a new business vision, they usually need to raise money for development, marketing, and talent management. Unless the start-up founders are high rollers with years of experience, they will look to venture capital and angel investors who will guide them through the first round of funding, known as the seed stage. In addition, there are usually a few individual angel investors who invest more than just financially in the company. Angel investors usually get to know the founders and have an interest in the business that transcends the necessary belief in a high return on investment.

Some distinguished angel investors include serial entrepreneurs and former CEOs who have a track record of bringing businesses public. The seed stage «plants the seed» for a start-up to thrive, in order to launch business operations and show revenue data for the next rounds of funding. Business leaders need to have specified projections and hard numbers ready on demand for venture capitalists before diving head-first into the seed capital round. A compelling business plan will include a strength, weaknesses, opportunities, and threats analysis.

Venture capitalists will need to know exactly how much funding a business will need and specific plans for allocating investment resources. Business founders should put together a list of supporters prior to meeting with venture capitalists. Founders should identify references and make sure that they are on board, understand the business idea, and know what to say when questioned by investors.
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Answered 3 years ago

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