Start-Up Venture:

Venture Financing

Guidelines for Getting (and Keeping) Funding

in Today's Market...

By Terry Collison, Blue Rock Capital. Used by permission.

Venture Financing Funnel

Venture Financing: Key Documents

1

Know what kind of company you have and what kind of funding situation you have. Be clear in your own thinking.

2

Be realistic. Don't waste your own time or the time of others by seeking funding that doesn't fit. Do go after funding that does fit.

3a

If you're a start-up, specifically plan an operation that will be "squeaky clean".

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3b

If you're already in operation, run your company to keep it completely clean.

3c

If things are in a mess (or if an outsider could fret about something), review and clean things up right now. Deal-killers include unpaid taxes, law-suits, problems with old partners, the accounting system, your corporate records, technology rights, etc. If there is a "surprise", call a huddle.

4.

Operate to demonstrate a clear competitive strength (not just an "advantage") and to achieve solid, current profitability. To get funded, these are more important than a strategy which achieves "market positioning" through negative cash flow.

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5a

Don't allow your situation to get desperate. Manage your company so that it is not dependent on getting outside funding.

5b

Develop an incremental strategy for development. Use "milestone" planning. Grow opportunistically, i.e., when the critical elements are available. Don't force it. And don't try to mortgage your future as a way of increasing the probability that funding will somehow appear.

6.

K.I.S.S. - Keep It Short and Simple. Make information about your company easily accessible and understandable. Use the Army presentation and the Grandmother test.

7.

Always have information that is current. When talking about funding, always be able to show (or at least discuss) both "in" and "out".

8

Continue. "Sticking with it" accounts for most successful outcomes. Remember: to benefit from "luck", you still have to be in existence.