Courtesy of Pam Martens
Judy Robinett, Author of “Crack the Funding Code”
There’s a new book coming on February 5 from the HarpersCollins Leadership imprint – and it’s a critical subject for every American, even if you’ve never before thought about starting your own business. That’s because America is losing its dynamism in creating new businesses, as we’ll discuss later in this article.
Written by Judy Robinett, Crack the Funding Code: How Investors Think and What They Need to Hear to Fund Your Startup is the how-to guide for young business owners to tap into private capital sources like angel investors or venture capitalists.
There are key sections in the book on how to find the people who can help you, how to write a solid business plan, financial statement and projections, and a compelling pitch. Equally important for the unsophisticated but creative entrepreneur, the book offers sound advice on hiring a lawyer to evaluate the deal’s terms and when to say no and walk away from potential outside investors.
When to say “no” to private capital is one of the most important decisions an entrepreneur needs to make. The book offers this, among numerous other considerations: “…you need to make sure that the percentage of equity your investors are asking for makes sense. Especially as you get into later funding rounds, be aware that you might be making a ‘devil’s bargain’ by giving away too much equity just to keep the doors open.”
For those not into the potential for a Faustian bargain, a Federal agency, the Small Business Administration, offers a wealth of assistance to help young businesses get up and running. Borrowing from parents, when possible, may also provide a far safer route, since they are usually heavily invested in seeing you succeed with far less of a greed incentive.
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