1/17 Three criteria for raising money: 1. Raise it before you need it. 2. Have a working product. 3. Have a business model from day one.
2/17 How much should you raise? The rule of thumb is to multiply your estimated cost by 4.
3/17 Calculate cost of development/manufacture, ie: R250. Double it for marketing & sales costs, ie: R500. Double it again, ie: R1,000.
4/17 How do you raise money? Activate your network. Don’t act desperate. Start with family and friends.
5/17 Let people know you’re raising money. Of course its embarrassing if you fail, because everyone knows that you tried.
6/17 If you’re not comfortable with making a fool of yourself, you’re not ready to start your own business.
7/17 Don’t be desperate. Desperation, like fear, can be sensed a mile away.
8/17 If you can’t ask your family, you don’t really believe in your idea. The thought of an awkward family Xmas is a wonderful litmus test.
9/17 Banks & rich people don’t hand out money easily. That’s why they have money.
10/17 Intelligent startup investors don’t invest in business plans and spreadsheets.
11/17 A business plan is what is required when your startup cracks the code, becomes a real business and needs to replicate a winning model.
12/17 Startups life comprises frantically trying to find a value proposition that gains traction in the market.
13/17 Until the code is cracked, business plans are a waste of time.
14/17 Being asked to draw up a business plan is like being asked to go and boil water whilst your wife gives birth.
15/17 The value of a business plan is in the process, not the result. Thinking through a SWOT analysis has saved many a futile effort.
16/17 Outside of Silicon Valley, working capital can’t be funded by raising funds. Working capital is funded by revenue. You need revenue.
17/17 People invest in dreams. Sell your dream. If no one buys, either it’s a crap dream or you can’t sell it.
Also published on Medium.