Entrepreneur's Cheat Sheet - Top Tools for Finding FundingLinda Jenkins, June 22 2015
Are you an entrepreneur on the hunt for capital to grow your enterprise? Or are you contemplating building your own startup company, yet wonder how you'll fund your business once it begins to scale? The best way to end your cash concerns and improve your odds of obtaining operating capital is to build an arsenal of funding-related tools. The following five resources are must-investigate tools for entrepreneurs who plan to accept outside investors into their companies. Whether you're planning on raising seed funding this year or want to know what your options are once your business grows, these resources provide invaluable information your company needs:
Dealroom helps entrepreneurs discover investors appropriate for their company. Find out which investors have previously funded companies in your sector in order to maximize the potential of a successful funding raise. Whether you are looking for an angel investor for your SaaS startup or a venture capitalist to invest in your FinTech company, Dealroom helps you narrow down your options so you can target the appropriate backers.
The Funded is an excellent tool every entrepreneur should have on their resource list. Uncover details on funding options based upon your geographic location, the amount of backing you need, or by the operating competency of potential investors. The Funded is so helpful they even offer a listing of banned investors your company might want to avoid.
Ask the VC
If you are raising capital for your company, it is imperative you understand the documents potential investors will send your way. From deal term sheets to investor rights agreements, you are going to face a steep learning curve to understand everything involved in accepting outside funding for your company. Ask the VC offers a wide range of funding documents you can review including Series A documents, Stock Reverse Triangular Merger forms, and ABA Form of Model Purchase Agreement forms. If you ever plan to accept outside capital for your business, it is essential you understand everything involved in selling equity in your company.
Foundrs provides an equity calculator for multi-party startups. Whether your company consists of just one co-founder or multiple early employees, this handy calculator can help you decide how to distribute equity amongst staff. If you plan to raise angel investor funding or seek a cash infusion from venture capitalists, having a clearly defined equity distribution formula is essential. Investors will want to know what their potential 'up side' is in order to determine whether funding your business makes sense. From who pitches investors to who codes your software, multiple variables impact equity outcomes. Whether you are planning to seek funding or you just want to determine a fair distribution of company equity, this calculator is a must-add item for you entrepreneur's resource list.
Although Sharewave is meant for companies that have already raised funding and have shareholders, they do offer a handy investor relations tool you can use even if you are still bootstrapped. Their helpful messaging interface lets you send official business documents to investors and track all communications with potential backers. Create profiles for investors you hope will back your company and monitor ongoing efforts you hope will entice them to fund your business.
Connecting with appropriate investors instead of chasing wannabe angels who rarely write checks is essential for entrepreneurs who hope to build multi-million dollar startups. Whether you plan to build the next unicorn like Uber or you want to grow a profitable startup that gets acquired by a major player like Google, Apple, or Facebook, you need to educate yourself in every aspect of accepting investor funding. The above-listed tools will help you understand your options so you are able to make informed decisions regarding the future of your firm.