Raising Money

Raising Money

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Merrill, Ronald E. | Nichols, Gaylord E. AMACOM, 1990
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IN THIS SUMMARY

Investors demand solid, specific, quantitative facts in order to evaluate you as well as your venture. So, your first step in the money-raising process is to do your homework, which consists of answering Five Key Questions: (1) Who are your customers? (2) What do your customers need and want? (3) What are you selling, and why will it satisfy your customers? (4) Who are you, and why can you beat the competition? (5) How much money will it take to accomplish your business goals, and how much money will your business make?Before approaching investors, you need to decide some important issues: What you will use the money for, how much money you need to raise, and your objectives in terms of equity, safety, and control. You also need to take into account your future as well as your current needs.You can improve your company's odds of success and retain more equity for yourself if you look at all the funding sources available. Examine the non-standard sources first and don't assume that you absolutely must obtain venture capital funds or a bank loan.You must assume that there will be problems in the negotiation process. Accordingly, it would be wise to build a strong negotiating position, learn the basic principles of negotiation, aim for a positive-sum deal, and settle all key issues among your team beforehand.