Startup Fundamentals
This document outlines a company’s objectives and strategies to attract investors and guide the business
What is a business plan?
How to get investors?
To find investors you have to go out of your comfort zone and network. Expand your palette of people and find trustworthy investors. Pitch the business idea with specific details and a strong plan to secure the investor
What is the business model where start-ups provide software to customers over the internet, often with a subscription?
Software as a service
What problem or challenge do you see people facing that could be solved with a new product or service?
Customer pain points, Compliance issues, Market problems, Marketing and advertising, Customer service, Pricing
Every time you take money from investors and give them a piece of your company what does this do to your personal equity?
It dilutes it
The term for the first round of funding where a company raises capital by selling shares to family, friends, and angel investors
What is seed funding?
Where does funding come from?
Funding can come from investors, family, friends, or the person starting the business. Also it depends on how big or small your company is going to be.
What is the name of the business model where a company connects buyers and sellers without owning the product or services?
Marketplace Business Model
What skills, passions, or unique expertise do you or your team possess that could be leveraged in a startup?
Identify your strengths. ...
Build confidence that these really are personal strengths that you possess
Determine how you can put these strengths to work for you
Make a plan
Continue to build your skills to a higher level.
This person is someone who uses their own money to invest in a private company.
what is an angel investor?
This valuation method determines the worth of a company before it has generated revenue
What is pre-revenue valuation?
Who to target for funding?
When looking for investors, it cannot just be any person off the street. Target someone with a good reputation and plenty of experience being an investor. Be sure to make sure both sides align when discussing business plans.
In which model does a startup provide its product or service for free, but charges for premium features or additional services?
Freemium
Which industries or trends are currently growing, and how could you capitalize on them?
How to Capitalize on Emerging Trends
Evaluate Impact and Alignment: Assess how a trend aligns with your mission and goals.
Develop an Action Plan: Create specific strategies for embracing trends, whether it's through product innovation, market expansion, or business model adaptation.
what is the process of using personal finances, revenue, and free or low-cost resources to build a business without outside investment.
what is bootstrapping?
A financial metric showing how quickly a startup is consuming its capital
What is a burn rate?
Do entrepreneurs have to pay back their investors?
The investors get a return from their investment. The amount of money being invested determines the percentage they will be getting back. They can make contracts to create a plan for repayment. The investor can always be bought out if the business is thriving.
What is the term for the model where startups sell subscriptions to regularly deliver products to customers?
Subscription Model
What gaps do you notice in your own daily life or work that a new startup could address?
Failure to plan for the future of your business.
Lack of demand for your products and services.
Ineffective marketing of your business.
Knowledge and skills gaps.
Financial management of your start-up.
what are programs that guide, mentor, and help fundraise for startups in exchange for an equity stake—and sometimes a cash investment as well—in the company.
What are Accelerators and incubators?
This funding stage follows seed funding and is usually provided by venture capitalists for rapid expansion
What is series A funding?
Are there different types of funding?
There are many types of funding options for startup businesses. Funding can be borrowed from family or friends. Investors are huge when starting a business. Angel investors focus more on the beginning stages of a startup company. Crowdfunding is collecting funds from many investors. Some banks support small businesses and provide them with a loan. Venture capitalists invest in more stable startups with a strong business plan. Seed funding is the initial funding when starting the business, trying to find investors and money.
What is the business strategy where startups give away their primary product for free but charge for complementary products?
Razor-and-blades model
What technologies or innovations are emerging that you could use to disrupt an existing market?
artificial intelligence (AI), machine learning (ML), blockchain, 5G connectivity, 3D printing, augmented reality (AR) and virtual reality (VR), advanced robotics, quantum computing, the metaverse, and advanced biotechnology
When a startup is raising a round of financing by issuing preferred stock at a specific valuation what is this called?
What is priced rounds?