Mike Roer

RAISING CAPITAL to launch or grow a new venture is a complex process that always takes more time than entrepreneurs assume.  Even for investment-ready companies, it usually takes 6 to 12 months to get a proposal in front of investors and for the capital providers to conduct due diligence.   The steps in the process are:

  1. COMPUTE HOW MUCH CAPITAL YOU NEED at each stage of development. (If your launch is successful and you achieve break-even quickly, you may want to accept additional outside capital to grow the company more quickly than would be possible by relying solely on profits to fund growth.)  The key is to allow for periodic infusions of equity capital, and resulting dilution of the founders’ ownership position.  The company that captures the most market share wins the race.
  2. DETERMINE THE RIGHT TYPE OF CAPITAL: personal saving, borrowing, equity, grants, or combination thereof for each stage of growth.
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