Uncategorized

Great News about increases in Funding

Posted in Uncategorized on July 16th, 2010 by claudia – Be the first to comment

Just finished reading this interesting article:

Venture capital investments climb 53%

BY RACHEL METZ

Associated Press

Venture capitalists funneled more money into U.S. startups in the second quarter, indicating continuing confidence that the economy is on the mend.

A study scheduled for release Friday shows that startup investments in the April-June period climbed 53 percent from the same three months in 2009 to $6.5 billion. This is the most money invested in startups since the third quarter of 2008.

The funding was divided among 906 startups, nearly 29 percent more than a year ago and the largest number since the fourth quarter of 2008.

Funding went to more seed and early-stage companies than in any quarter since mid-2007. That signals investors are feeling good about investing in new ideas even though the market for acquisitions and public stock offerings for more mature startups continues to be rough — meaning it’ll be awhile before venture capitalists see returns on their investments.

While there are still many later-stage companies waiting to go public or be acquired, “the venture capital industry has been able to turn its attention to the next crop of companies,” John Taylor, vice president of research for the National Venture Capital Association, said during a conference call with reporters Thursday.

The study was conducted by PriceWaterhouseCoopers and the National Venture Capital Association based on data from Thomson Reuters.

As in the past, biotechnology startups snagged the most funding in the quarter, receiving $1.3 billion in investments, up 43 percent from the same period in 2009.

Last year, investments in that sector fell, but venture capitalists have continued to invest heavily because large pharmaceutical companies are still interested in buying startups that are developing promising drugs.

Investments in clean technology companies tripled to $1.5 billion — its biggest quarter since the study began keeping track of investments in 1995 — while software company investments climbed nearly 48 percent to $1 billion.

Money that went toward first-round financing climbed 46 percent to $1.1 billion. There were 281 companies that got their first financing during the period, compared with 182 in the same quarter last year. Most of these deals were with companies in the seed and early stages of development, which is consistent with past activity and shows investors continue to be optimistic about funding new ideas.

The quarter’s biggest deal was $350 million; it went to Better Place, which offers electric vehicle support services. The second-biggest deal was $150 million, for BrightSource Energy, which makes large-scale solar power plants.

Do you have a real estate project that needs funding?

Posted in Uncategorized on July 8th, 2010 by claudia – Be the first to comment

In the last 2 years is has been very hard to fund any Real Estate projects because the requirements have changed and the funding sources have limited the type of projects that they consider.

It is very clear what is getting funded in Real Estate:

1) Income producing properties

2) Real Estate projects with current sales, with at least 10% liquidity, principals with good credit scores and good financials.

3) Large resorts with Flag Hotels over $100 Mill with liquidity and pre-sales.

If your project has this criteria, please feel free to contact us.

Do you have an internet company that you want to get funded?

Posted in Uncategorized on June 8th, 2010 by claudia – Be the first to comment

We get inundated with internet projects and I thought it would be helpful to write about what is required before we look at an internet project.

It is important to understand that most Investors do not fund ideas. Investors want companies that have started in which  the principal(s) or founder(s) has invested his/her own money and time.

Because so many people have great ideas that are never executed, ideas are rarely funded unless you have lined up an impressive management team.

Most investors for web based applications want to see an application that is at least in Beta testing, with a certain percentage of users ( whether free users or paid subscribers).

It is important to understand that a website that is not functional is not going to get Investors money. Maybe at this stage you can get friends and family money. If the website is not functional yet, it can take many months to a year to actually work so Investors are very hesitant to fund companies at this stage.

Most web based companies  talk about the market that they will capture by siting  the number of users of websites such as Facebook, Linkedin, etc.  and make presentations based on capturing a percentage of their users and this is a turn off to most investors, because which ever percentage that an entrepreneur chooses from those figures is going to be very hard to capture for a while.

They say things like: “We are going to capture 1% of the 400 Mill users of Facebook in our first 6 months and then it will go viral from there”  and we have seen that most applications  never  capture even a small percentage of what they expect.

So if you want your web based application to have a chance to be funded, have it working and prove that there is a need for it by having a percentage of the users that you plan to capture before you call on Investors, it makes our job so much easier.

Getting Investor’s Money

Posted in Uncategorized on April 16th, 2010 by claudia – Be the first to comment

I read an interesting article by David Glass.

He says that:”There are five types of potential investors in a business, Founders, Family, Friends, Fools and Experts. Founders are the individuals who start the company and may have some experience as an investor in a business but most of the time founders are new to getting a business started.

A traditional source of funds for many start-up entrepreneurs is Family, Friends and Fools. The family and friends will invest in you just because they like you, want you to do well, etc. The fools invest their money like a gambler does by placing $100 on black on roulette in Vegas. They don’t know why they choose black – but they hope they’ll make some money with it.

You can raise some good money with founders, family, friends and fools, but most of the time it’s not just about the money but rather the team of people you are putting together to start and grow your business. This is where the experts come in. If you are looking for investor money it’s important to know how to get to the experts and what to say once you are there. Expert investors are Angel Investors and Venture Capitalists. I would stick with the angel investors to start. There are a lot more of them and they are easier to get to than a Venture Capital firm.

There are television shows now even showing people presenting to investors – The Shark Tank just came out and has entrepreneurs presenting their business to a panel of five investors. The investors have all made millions starting their own companies and are now looking to have their money work for them in other ventures. They are experts – but the real winner in a show like that is the producer, Mark Burnett. He gets 3% of gross sales from anyone who wants to audition for the show. That’s right, just to audition you need to give up 3% of all your sales.

It can be very expensive to work with investors and if you have a great idea but little experience or knowledge of working with investors you could get eaten alive. Thus the name: The Shark Tank.

Here are a few questions an expert investor will likely ask you. Be prepared to answer these in your presentation or after.

Does the company recognize competitors?
Does the company control a first-mover position?
Does the Board of Directors have a diversity of skills and background?
Has the management been previously funded?
Has the company articulated the use of raised funds?
Has the company considered a reasonable exit strategy?
Do the product/services solve a current market issue?
Are there unique attributes to the product/services which provide market differentiation?
Is the market adequately described?
Is the market realistic?
What is the size and scope of the market?
Is the market considered a growth market?

There are many more questions that you can be asked and should be prepared to answer. If you ever do get in front of an expert investor be prepared. If you aren’t, schedule a time to present to them in the future. You wouldn’t want to waste your one opportunity.

David Gass – Founder
Business Credit Services, Inc.
www.bcscredit.com

http://www.bcscredit.com/blog/?p=218

Why do I need a Business Plan?

Posted in Uncategorized on November 20th, 2008 by claudia – 3 Comments

15 Reasons You Need a Business Plan By Tim Berry | March 13, 2006

Article from Entrepreneur Magazine: http://www.entrepreneur.com/startingabusiness/businessplans/businessplancoachtimberry/article83818.html

Whether you’re just starting out, growing your business or seeking outside help, a well-thought-out business plan is the vehicle you need to get you there. 

Why do you want a business plan? You already know the obvious reasons, but there are so many other good reasons to create a business plan that many business owners don’t know about. So, just for a change, let’s take a look at the less obvious reasons first and finish with the ones you probably already know about. Think of this as a late-show top 10, with us building up to the most important reasons you need a business plan.

15. Set specific objectives for managers. Good management requires setting specific objectives and then tracking and following up. I’m surprised how many existing businesses manage without a plan. How do they establish what’s supposed to happen? In truth, you’re really just taking a short cut and planning in your head–and good for you if you can do it–but as your business grows you want to organize and plan better, and communicate the priorities better. Be strategic. Develop a plan; don’t just wing it.

14. Share your strategy, priorities and specific action points with your spouse, partner or significant other. Your business life goes by so quickly: a rush of answering phone calls, putting out fires, etc. Don’t the other people in your business life need to know what’s supposed to be happening? Don’t you want them to know?

13. Deal with displacement. Displacement is probably by far the most important practical business concept you’ve never heard of. It goes like this: “Whatever you do is something else you don’t do.” Displacement lives at the heart of all small-business strategy. At least most people have never heard of it.

12. Decide whether or not to rent new space. Rent is a new obligation, usually a fixed cost. Do your growth prospects and plans justify taking on this increased fixed cost? Shouldn’t that be in your business plan?

11. Hire new people. This is another new obligation (a fixed cost) that increases your risk. How will new people help your business grow and prosper? What exactly are they supposed to be doing? The rationale for hiring should be in your business plan.

10. Decide whether you need new assets, how many, and whether to buy or lease them. Use your business plan to help decide what’s going to happen in the long term, which should be an important input to the classic make vs. buy. How long will this important purchase last in your plan?

9. Share and explain business objectives with your management team, employees and new hires. Make selected portions of your business plan part of your new employee training.

8. Develop new business alliances. Use your plan to set targets for new alliances, and selected portions of your plan to communicate with those alliances.

7. Deal with professionals. Share selected highlights or your plans with your attorneys and accountants, and, if this is relevant to you, consultants.

6. Sell your business. Usually the business plan is a very important part of selling the business. Help buyers understand what you have, what it’s worth and why they want it.

5. Valuation of the business for formal transactions related to divorce, inheritance, estate planning and tax issues. Valuation is the term for establishing how much your business is worth. Usually that takes a business plan, as well as a professional with experience. The plan tells the valuation expert what your business is doing, when, why and how much that will cost and how much it will produce.

4. Create a new business. Use a plan to establish the right steps to starting a new business, including what you need to do, what resources will be required, and what you expect to happen.

3. Seek investment for a business, whether it’s a start-up or not. Investors need to see a business plan before they decide whether or not to invest. They’ll expect the plan to cover all the main points.

2. Back up a business loan application. Like investors, lenders want to see the plan and will expect the plan to cover the main points.

1. Grow your existing business. Establish strategy and allocate resources according to strategic priority. You can find more information about growing your business with a business plan by reading “Existing Companies Need Planning, Too.”

Tim Berry is the “Business Plans” coach at Entrepreneur.com and is the president of Palo Alto Software Inc., which produces the industry’s leading business planning software, Business Plan Pro, as well as other popular planning applications for businesses.


Bookmark and Share

The Basic Principles of a Venture Fund

Posted in Uncategorized on August 20th, 2008 by seth – Be the first to comment

The Basic Principles of a Venture Fund

Venture capitalists are typically former executives or investment bankers who have turned to raising a private fund to make particular investments. A venture fund can be as small as $1 million to upwards of billions of dollars of investment capital. The capital for these funds can be contributed by multiple sources, including the VC’s themselves, but more typically this investment capital comes from large institutions with a lot of money that they need to invest, such as universities, insurance companies, state pension funds and other types of grouped investment sources.

Click here for the rest of the article, hosted by the Go BIG guide…


Bookmark and Share

Funds for Projects

Posted in Uncategorized on August 20th, 2008 by seth – 1 Comment

A new site has surfaced on the net offering a great -goto for any Venture Capitalist looking for projects to bid on or any company looking for funds or seed money for upcoming projects. Its called Funds for Projects, check it out, click here.

Its also a great source of information, check out the section on Due Diligence. Very Informative!

Cuil’s Dangerous Strategy

Posted in Uncategorized on August 20th, 2008 by seth – Be the first to comment

Cuil’s Dangerous Strategy

Posted by Scott Anthony on July 28, 2008 9:47 AM

An article in the Wall Street Journal today described how a start-up company called Cuil Inc. has assembled a “dream team” of engineers to try to dethrone Google Inc. Odds are that Cuil (pronounced “cool”) ends up like the seemingly unbeatable team of NBA players that finished sixth in the 2002 FIBA world championships.

Cuil’s search engine launched today. It claims to cover three times the number of Web pages that Google covers (in trial runs this morning it ran very slowly and found nothing under my name!), and displays its results like a magazine. President and co-founder Anna Patterson, an engineer who helped build Google’s search index, told the Journal, “You can’t be an alternative search engine and smaller. You have to be an alternative and bigger.”

To top Google, Cuil built a top-flight team of engineers with search experience at eBay, IBM, AltaVista, and, of course, Google. It is backed with more than $30 million of venture capital.

Cuil is playing a dangerous game. Clayton Christensen’s research found that entrants almost always fail when they try to leapfrog over current competition by playing today’s game better. Incumbents have the skills, resources, and motivation to defend against these “sustaining” attacks.

If Cuil’s search technology does indeed work better than Google’s, you can be sure that Google will be fiercely motivated to fight back. With all the engineering talent at its disposal, it is hard to believe Google won’t win that battle.

Perhaps Cuil’s goal is to be acquired by Google, in which case it might not care about its long-term success. If it really does hope to ultimately best Google, it better have a disruptive card up its sleeves. My next post will see if lessons from “anomalies” to the pattern of entrants losing sustaining battles could help Cuil plot a path to success.