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"Business Plan
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If you want to raise capital, then you need a professional business plan. This video shows you how to finish your business plan in 1 day.

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"The TRUTH About
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Most entrepreneurs fail to raise venture capital because they make a really BIG mistake when approaching investors. And on the other hand, the entrepreneurs who get funding all have one thing in common. What makes the difference?

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"Brand NEW
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The Internet has created great opportunities for entrepreneurs. Most recently, a new online funding phenomenon allows you to quickly raise money to start your business.

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"Old-School Leadership
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"Barking orders" and other forms of intimidating followers to get things done just doesn't work any more. So how do you lead your company to success in the 21st century?

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Growthink Blog

New Capital Raising Articles on Growthink.com

Written by Growthink on Tuesday, August 4, 2009
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We just published a new series of capital-raising articles on the Growthink website, within our new "Capital Raising Resource Center." 

 

Angel Funding Articles



Bank & SBA Loan Articles



Creative & Alternative Financing Articles



Grant Articles



Venture Capital Articles

 

Stay tuned! In the coming weeks and months, we'll be adding new articles and videos.

 

Are there any specific capital-raising topics you'd like us to cover?  Let us know by leaving a comment below.

 

Are you an entrepreneur looking to find angel investors for your deal? Learn proven networking, presentation, and negotiation tactics from Growthink's Angel Investor Guide. 


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Capital Raising Bootcamp Preview

Written by Dave Lavinsky on Monday, July 27, 2009
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Here is a video that explains precisely why raising capital is so important to your business.

And, importantly, it includes details regarding why it’s critical that you understand how to raise capital from multiple sources, even if you currently are only seeking one particular type of capital...

Near the end, I reveal a fantastic (and perhaps my favorite)  tip, which is the single most controllable factor that you have to improve your success in both fundraising and successfully growing you business.

 


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Israel Venture Capital: The Silicon Valley of the East

Written by Jacklyn Rome on Wednesday, July 1, 2009
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Israel, more fondly nicknamed as the “Silicon Valley of the East”, is the largest recipient of United States venture capital, absorbing 7.7% of outbound investment dollars. For a small and relatively new country, Israel has jumped into the limelight as one of the largest producers of new technologies. The country is responsible for some of the most prominent inventions over the past several decades, including drip irrigation, instant messaging (ICQ), Intel’s Centrino computer chip, and voicemail technology.

Israel also holds the second greatest number of foreign companies on the NASDAQ, second only to Canada. Some of the more prominent multi-billion dollar corporations listed on the exchange include TEVA Pharmaceuticals (market cap: $41 billion), the world’s largest generic drug manufacturer, and Gilead Sciences (market cap: $43 billion), which develops therapies for viral diseases, infectious diseases, and cancer.

In 2008, over $2 billion was invested in 480+ Israeli high-tech companies, an increase of 18% over the prior year. Roughly 50% of funds came from outside of Israel, primarily from the United States, which has also shown significant investment in Israel by building Israeli satellite offices for American companies. In 1974, Intel chose Israel as the location for its first design and development center outside the United States, and thereafter opened 8 locations, employing over 5,300 employees. International companies such as Microsoft, IBM, Nokia, and Motorola have also followed in the footsteps of Intel Corporation by opening offices in Israel.

So why has Israel drawn so much VC funding and attention from the international business community?

Israel has the highest number of university degrees relative to the population and the largest number of scientists per capita in the world, with 145 scientists per 10,000 citizens, in comparison with the United States at 85 per 10,000. Additionally, Israel has the highest number of start-up companies in the world outside of the United States.

Israelis also receive extensive technical training through their compulsory military service and have adapted several advanced military technologies to other applications. For example, Given Imaging, which in 1998 came out with the first ingestible disposable video camera for viewing and diagnosing the small intestine, developed and adapted their product from an electro-optical device for military missiles.

The enormous pool of talented workers in Israel is also much more affordable for technology companies than those in Silicon Valley, and the government has been a strong supporter of growth in the hi-tech sector. The Israeli government provides incentives and grants to encourage capital investment and scientific research within the country.

Growthink has worked with dozens of Israeli entrepreneurs throughout its ten years of operations and has several strategic alliances with individuals within the Israeli Venture Capital community.

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Raising Funding for a Social Network or Web 2.0 Concept: Has the Bubble Burst?

Written by Jacklyn Rome on Monday, June 29, 2009
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Many entrepreneurs and investors have been capitalizing on developing internet capabilities and the increased usage of social networks around the world by creating a new wave of social networks and Web 2.0 websites. Over the last few years, the Web 2.0 sector has seen a number of acquisitions for companies including Bebo, Blogger, Cork’d, Del.icio.us, Flickr, Jaiku, Last.fm, Picasa, Rojo, Skype, Sphere, StumbleUpon, and Webshots. Entrepreneurs have been encouraged by large scale transactions including YouTube selling for $1.7 billion, Facebook’s valuation at $15 billion based on Microsoft’s recent investment, and MySpace’s sale for $580 million.

A great Web 2.0 website can be built on a shoestring budget with a few smart developers and an innovative concept driving the growth of the business. Web 2.0 companies have the potential to experience overnight notoriety through a few press mentions and can grow exponentially thereafter.  Thus, venture capital firms do expect to see a great deal of traction in the marketplace before seriously considering funding your social network. Due to market conditions, VCs today are seeking to fund companies that are already well on their way to success, rather than higher risk and earlier stage deals that they might have previously considered.  As a social network, the right time to contact a VC is when your site has a solid user base and viral growth through an innovative guerilla marketing strategy, not at the idea stage. For example, just today Glubble BV (www.glubble.com), a niche Amsterdam based social networking website for families with children under the age of 12, announced that they raised $1 million in Series B funding. Glubble was launched in 2007 and counts 300,000 family pages on its service to-date.

Due to the large number of social networking sites that were funded in the last three years, VCs are getting increasingly skeptical of these concepts. Kleiner Perkins, one of the largest VCs, has publicly stated that they are no longer investing or even looking at Web 2.0 companies. I’m not suggesting that you get discouraged by this or that the opportunities for new web 2.0 or social networks have passed, but realize that the competition is great and you must differentiate yourself both in your market and when pitching to venture capital firms. Stand out by targeting niche users, such as senior citizens, travelers, specific cultures, or countries. Find a niche that has not been already conquered, but that has enormous value, and do not promote your business as the next MySpace or Facebook. These networks have generated enormous and loyal user bases and it will be extremely challenging if not impossible to replace them.

Growthink has worked with nearly 100 web 2.0 businesses over the last few years and has developed strong expertise in the sector. We can help you to strategically think through your business model and create a compelling business plan that will help your Web 2.0 company stand out among the throngs of competitors. We can also advise you on how to improve your viral marketing strategy to optimize your valuation before bringing your company to a VC firm.

If you are an existing website, we can also help provide you with strategic recommendations based on a complimentary website audit. Please follow this link for more information:

http://www.growthink.com/internet-marketing/website-audit#auditform


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A Venture Capitalist, A Corporate Investor & Two Angels - Animoto is Listening

Written by Dave Lavinsky on Tuesday, June 23, 2009
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When entrepreneurs ask me what sources of capital to tap to fund their businesses, my answer is generally "as many as you can."

I often point to companies like Google, who relied on credit cards, angels and venture capitalists in its early days.

Recently Animoto heeded my advice. In it's most recent round of funding, Animoto raised $4.4 million from a venture capitalist (Madrona Venture Group), a corporate/strategic investor (Amazon.com), and two angel investors: iStockphoto founder Bruce Livingstone and angel investor Jeff Clavier (Clavier is also the founder and managing partner of SoftTech VC, a seed-stage venture capital firm).

What's even more interesting is what Animoto is. Animoto is a website where you can quickly and easily turn photos into videos. Why is this interesting? Because you can use Animoto to create a video about your company to market it to investors.

So not only is Animoto teaching each of us about how to best raise capital to fund our growth, but is offering a tool to help us market ourselves to investors.

To see how it worked, I created an Animoto account (doesn't cost anything and is quick to do) and created a quick video. I was home at the time with my daughter, so we did it together and created one with a few of her recent horseback riding pictures.

The good news is that it was really simple to create the video. The negatives were that 1) rendering time was slow (plan to wait at least 5 minutes before the video is ready to be viewed for a 30-second clip), and 2) the non-paid version only allows your video to last 30 seconds. Fortunately for $3 per video, or $30 for a year, you can create full-length videos.

Overall, Animoto is a great lesson in capital raising and a great tool to use when raising capital for your business!

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How to Raise Capital as a First Time Entrepreneur: An Interview with Brad Feld

Written by Dave Lavinsky on Thursday, May 7, 2009
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Yesterday I had the opportunity to interview Brad Feld, who is considered among the elite investors in privately held companies.

For those of you who are not familiar with Brad, his background includes starting and selling his own software company, investing as an angel in 40 to 50 companies, and founding or co-founding three venture capital firms: Intensity Ventures, Mobius Venture Capital and Foundry Group, where he currently serves as Managing Director.

While there were several invaluable points for entrepreneurs seeking capital in the interview, I found the following to be most interesting:

1. Your VC firm is your partner.

Many first-time entrepreneurs view VCs simply as providers of capital. In actuality, VCs are partners. They exert control over your company. They have experience in product development or scaling companies, or both, and can provide significant value beyond the money they infuse in companies.

Because VCs are partners that exert control, you need to assess them much like you would other partners. Mainly, you need to make sure that there is a really good fit.

2. Angel investors are the friend of the first-time entrepreneur.

First time entrepreneurs should strongly consider angel investments prior to venture capital. Angel investors often have financing experience which can help entrepreneurs navigate the VC waters when they are ready (there are a ton of terms and issues involved with venture capital that most first-time entrepreneurs don't know about).

Angel investors also tend to have relationships with VCs. Also, angels often have the operational experience to help grow the entrepreneur's company. And finally, the angels' funding can help the company grow to a point where it is more suitable for venture capital.

However, when structuring angel deals, it is imperative to keep the pricing/valuation fair and the deal terms as simple as possible. If not, raising subsequent venture capital rounds becomes more challenging.

3. Don't look for investors who are not a good fit

Brad mentioned the 80/20 or even the 99/1 rule. Essentially, entrepreneurs should spend a ton of time on the 1% of investors who are a great fit. And not waste their effort on the other investors.

Two key aspects that Brad mentioned for ensuring a good fit are 1) geography (many VCs will only invest in certain geographic regions) and 2) sector (Foundry Group simply doesn't invest in Clean Tech; no matter how exciting the company looks). I would also add "stage" to this list as many VCs focus on companies at specific stages (e.g., some only want post-revenue companies, etc.)

You can listen to the full 30-minute interview by clicking the blue triangle on the audio player below:

 

Are you an entrepreneur looking to find angel investors for your deal?  Gain all the tips and advice you need with our Growthink's Angel Investor Guide.


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Obama Stimulus Package Stimulates Renewable Energies Across the Nation

Written by Jacklyn Rome on Tuesday, April 28, 2009
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While you probably have heard about the Stimulus Package and President Barack Obama’s push toward increased usage of renewable energies, you may not be aware of how this initiative can help your business and where the money is in fact going. The following information will explore the specific allocations of the Energy Stimulus and how you, as a business or as a consumer, can take advantage of this unique opportunity.

One of the most significant components of the $787.2 billion stimulus package signed into effect by President Obama in February 2009 is the initiative to spur development of “Clean, Efficient, American Energy”.  Of the total sum, more than $30 billion will be allocated to transforming the nation’s energy transmission, distribution, and production systems by improving grid design and investing in renewable energy and another $5 billion will be spent on home weatherization. The energy component of the initiative is aimed at reducing the country’s dependence on fossil fuels, spurring innovation, and creating jobs nationwide.

The following outlines the specific initiatives the energy stimulus money will be dispersed to:

  • Improvement of Electricity Grid Design - $11 billion to build new power lines and deliver renewable energy
  • Grants for Local Governments - $6.3 billion to state and local governments to reduce carbon emissions in their localities
  • Renewable Energy Loans - $6 billion for funding renewable energy projects
  • Home Weatherization – Weatherization is the process of protecting a structure’s interior from the exterior elements and improving interior energy consumption efficiency through highly effective insulation. The government has allotted $5 billion to lower income housing
  • Eco-Friendly Government Buildings - $4.5 billion to make government buildings more energy efficient
  • Fossil Energy Cleanup - $3.4 billion for carbon capture technology development
  • Green Research – $2.5 billion in grants for universities, companies, and national laboratories that will demonstrate advancements in technology to foster energy independence
  • Advanced Battery Grants - $2 billion to spur development of advanced vehicle and other battery systems
  • Green Job Training - $500 million to train workers in the green energy sector
  • Electric Transportation - $400 million in grants to develop electric vehicles
  • Smart Appliances - $300 million in customer rebates for the purchase of energy efficient appliances
  • Federal Vehicles - $300 million to replace or retrofit government vehicles to use renewable energies
  • Department of Defense - $300 million to develop more energy efficient military equipment and bases
  • Local Transportation - $300 million to local governments to purchase buses and trucks that use alternative fuels, and $300 million to replace or retrofit vehicles that use diesel fuels
  • Energy Efficient Housing - $250 million to increase energy efficiency in homes, particularly low-income housing

Historically, companies have been reluctant to invest in renewable and clean energy technologies, because they require tremendous economies of scale to be profitable. Since these systems require large capital outlays upfront, it takes a long time to see return on investment. The Stimulus Package aims to combat these hesitations toward switching to renewable energy systems. The initiative will benefit various members of the energy sector from large utility companies upgrading energy grids to small businesses installing solar panels. It also benefits end consumers striving to make their homes more energy efficient through tax breaks and government subsidies.

Federal Involvement will Spur Investment, Growth, and Job Creation

The influence of government grants, loans, and tax breaks, will help encourage progress for both the supply and demand side of this sector. On the supply side, the government will provide research grants and funds for investing in promising existing and new technologies. On the demand side, the Stimulus Package will help companies and homeowners purchase new green energy systems by making them more affordable. The Stimulus Package will also create thousands of new jobs across the nation fulfilling these initiatives, helping to fuel unemployment and the overall status of the economy. According to Nancy Pelosi, investment in the green sector will create close to 500,000 jobs in 2009, 67,000 of which will be in the solar and wind power installation sector. Ultimately, the energy portion of the stimulus package will reduce American reliance on foreign nations for fossil fuels, generate domestic jobs, and promote innovation and adoption of new renewable energy technologies nationwide.

Access to the Allotted Funds

Whereas other areas of the stimulus package will be distributed through company applications and competitions to receive the funds, the money attributed to the energy sector will be primarily dispersed through tax credits and purchase incentives. For example, within solar and wind energy, the government is now offering a 30% tax credit to offset the cost of installing a solar energy system or wind farm, whereas previously the tax credits had a cap of $2,000 and $4,000, respectively. Some additional credits include up to $7,500 for buying a plug-in hybrid electric car or a 50% tax credit for gas stations or other businesses that install alternative fueling pumps. For more information on the specific types of grants or tax credits offered, please find more information at the following website: http://www.greentechmedia.com/articles/obama-signs-stimulus-package-5736.html.

So What Does This Mean for You?

Energy Companies

If you are involved in the clean energy sector, Growthink recommends additional research into the specific provisions of the stimulus to see if your business will qualify for federal subsidies or research grants. Additionally, Growthink suggests putting together a strong marketing campaign that highlights government support and tax credits for purchasing your products. This will educate the many unaware businesses and consumers that believe switching to alternative energies is outside of their affordability. Additionally, it is a wonderful way to draw positive publicity for your business. Growthink is happy to provide you with complimentary feedback on your current marketing program. We can also assist you by utilizing our expert group of marketing professionals to work with you on creating a Marketing Plan to target your customers in the most effective way possible.

Contracting, Construction, Eco-Friendly Transportation, and Electrical Infrastructure Companies

If you own a contracting, construction, eco-friendly transportation, or electrical infrastructure company, Growthink recommends seeking additional information on how you may bid for funds allocated to electricity grid design, weatherization, environmentally friendly transportation development, energy efficient housing, and building renovations. Growthink can help you with conducting this research and help articulate how your business is the most suited to perform the specified work or receive a government grant.

Consumers

As a consumer, you can reap the benefits of the energy sector stimulus by utilizing the tax incentives to switch to renewable energy systems, such as installation of a solar or wind energy system in your home. The government is also offering customer rebates for those who purchase energy efficient appliances for their homes.

The Obama Stimulus Plan is an unprecedented program that has created unique opportunities for tremendous innovation and growth within energy efficiency. Please contact Growthink for more information on how we can help you position your company to benefit from the billions of dollars allocated to this sector and within your reach.


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Sourcing Investment Opportunities via the Internet

Written by Jay Turo on Thursday, March 12, 2009
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