Smart needs (was: Their terms)

Suggested topics & further reading:

An investor can provide you with more than just cash. Often they have experience as an entrepreneur themselves, have some valuable contacts or have links to talent that can help you expand your business. Using insight from the questions you asked yourself in the previous blocks, you can determine which aspects of building your business you could use some help with. A public investor might be able to help you come in contact with governments: if your business is focused on the public sector or if your product isn’t lawfully approved yet. A corporate partner or a university could, for example, help you develop your product further by leveraging their high-tech facilities and knowledge.

Just the way you did with your terms, think about your ideal investor and their ideal deal offer: What do they typically offer and ask for in return? Do the terms of that sort fit with the ones you’d like to offer? Think about ways to improve the alignment between your terms and your investor’s terms. Do not hesitate to be critical: It is fine to say no and explore other options if the terms of the deal don’t feel right.

Smart needs

Consider your smart needs and ownership preference: Do you want something more than money from your investor?

What kind of role do you want this investor to play? For instance, maybe you want an investor who has access to the US market, or maybe you want an investor who can attract solid technical talent to your team. Do they want to advise, be actively involved or just want to be passive?

Does your potential investor have a focus on your business’s sector?

Based on your current weaknesses and future plans, what expertise or contribution (beyond money) do you need from your investor?

What are areas in building your business that you could use help with?

Does the investor offer sufficient added value (beyond capital) for building, supporting and/or scaling your business model?

Have you checked the investor’s track record concerning the extra value they offer? Have you checked how many successful exits they’ve been able to orchestrate? It can be a good idea to talk to some companies in your investor’s portfolio; they can give a good impression of your investor’s track record in creating value and incentives for the portfolio companies.

Funding resources

Videos

Books

  • Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist
    Venture deals is ideal for acquainting yourself with the venture capital process–from the first to the last step. The book covers how VCs operate and covers all the essential terms surrounding investing; from vesting and anti-dilution, to drag-along agreements. It relates all the terms with real business cases, and is full of advice from venture capitalists and entrepreneurs. It is also a great primer for preparing yourself for a venture negotiation, with negotiation tactics and a review of the most crucial terms of a term sheet. A must-read if you’re seriously looking into raising capital. View book
  • Venture Capital Deal Terms
    View book
  • Mastering the VC Game
    Written by someone who has been in both a startup role and a VC role, this light read is a great guide to understanding the relationship between a startup and a VC negotiating for a deal. It can guide you through ways of negotiating a funding deal, such that the VC’s vision coincides with your’s–and the deal grows into a partnership. It also covers ways of pitching your startup and highlights the important details of a single deal. A book full of insights, examples and narratives drawn from the author’s experiences and from interviews of people in businesses. View book
  • What Every Angel Investor Wants You to Know: An Insider Reveals How to Get Smart Funding for Your Billion Dollar Idea
    A great read for any smart funding enthusiast! It uncovers ways for establishing relationships with investors who match your smart needs. In a light, though-provoking manner, the author shows the very specific smartness that investors want to experience in a company, even before getting to the financial details. It illustrates the need for: an exit strategy, “do” (rather than “due) diligence, authenticity and concrete evidence of customer validation. It goes into the minds of angel investors, showing how they view crowdfunding, teams, scalability, due diligence and term sheets. View book
  • The Art of Startup Fundraising: Pitching Investors, Negotiating the Deal, and Everything Else Entrepreneurs Need to Know
    A very practical guide to raising capital in the modern world of digital finance. It gives generic, but concrete explanations, tips and tricks on the entire funding process from seed stages to growth stages; giving a set of tools to build financing strategies in the modern startup world. With insights on setting milestones, understanding investment types, identifying funding rounds, gaining momentum and avoiding the common mistakes, this book is a fine blueprint for carving your financial game plans. View book
  • The Entrepreneurial Bible to Venture Capital: Inside Secrets from the Leaders in the Startup Game
    In the author’s own, concise words: “The Entrepreneurial Bible to Venture Capital is packed with invaluable advice about how to raise angel and venture capital funding, how to build value in a startup, and how to exit a company with maximum value for both founders and investors. It guides entrepreneurs through every step in an entrepreneurial venture from the legalities of raising initial capital to knowing when to change tactics.” View book
  • Raising Capital: Get the Money You Need to Grow Your Business
    With hypercompetitive landscapes in scoring startup funding, this book stands out with its highly practical, straightforward tools for fulfilling all the formalities surrounding: financing, business plans, loans, offering materials etc. It covers everything from VCs and IPO, to franchising and acquisitions. With its concrete nature that incorporates lists, charts and template forms, this book offers detailed strategies for building the financial wing of your business. View book
  • The Startup Funding Book
    Perhaps the most accessible, comprehensive and straightforward book on the market – specifically geared towards the topic of startup funding. It answers all the key questions that startup founders can have regarding funding; from whether they even need external financing, to knowing how to contact investors to get it. This book practically teaches you how to think like investors, and to use those insights to be more persuasive towards banks, VCs and angel investors. Definitely a must-read for any startup looking for smart funding, with the first hundred pages of the book downloadable for free! View book

Startup tools

  • The Complete Startup Toolkit
    It is exactly what the name says it is! Contains countless valuable resources: tool directories, curated lists, freebies for entrepreneurs, tools to learn programming, web development resources, digital marketing resources and much more View tool
  • Startup Resources
    “Tightly curated lists of the best startup tools”; features tools nicely categorized into a really diverse set of topics. View tool
  • StartupStash
    “A curated directory of resources & tools to help you build your Startup”: Contains everything you need from A to Z. View tool
  • Steve Blank’s Startup Tools
    A comprehensive list of startup tools; on topics ranging from finding co-founders and developing apps to customer development, recruiting and startup funding. View tool
  • Y Combinator’s Startup Library
    A curated list of articles covering everything surrounding startups: Scaling, hiring, pitching, equity, fundraising, valuation etc. Also contains must-read startup books and a free course on starting a startup. View tool

Websites and articles

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Suggested topics & further reading:

An investor can provide you with more than just cash. Often they have experience as an entrepreneur themselves, have some valuable contacts or have links to talent that can help you expand your business. Using insight from the questions you asked yourself in the previous blocks, you can determine which aspects of building your business you could use some help with. A public investor might be able to help you come in contact with governments: if your business is focused on the public sector or if your product isn’t lawfully approved yet. A corporate partner or a university could, for example, help you develop your product further by leveraging their high-tech facilities and knowledge.

Just the way you did with your terms, think about your ideal investor and their ideal deal offer: What do they typically offer and ask for in return? Do the terms of that sort fit with the ones you’d like to offer? Think about ways to improve the alignment between your terms and your investor’s terms. Do not hesitate to be critical: It is fine to say no and explore other options if the terms of the deal don’t feel right.

Smart needs

Consider your smart needs and ownership preference: Do you want something more than money from your investor?

What kind of role do you want this investor to play? For instance, maybe you want an investor who has access to the US market, or maybe you want an investor who can attract solid technical talent to your team. Do they want to advise, be actively involved or just want to be passive?

Does your potential investor have a focus on your business’s sector?

Based on your current weaknesses and future plans, what expertise or contribution (beyond money) do you need from your investor?

What are areas in building your business that you could use help with?

Does the investor offer sufficient added value (beyond capital) for building, supporting and/or scaling your business model?

Have you checked the investor’s track record concerning the extra value they offer? Have you checked how many successful exits they’ve been able to orchestrate? It can be a good idea to talk to some companies in your investor’s portfolio; they can give a good impression of your investor’s track record in creating value and incentives for the portfolio companies.

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