🧚🏼‍♀️ Intro

Welcome to the final section of the Pre-Incubator Curriculum! Before wrapping up the program, one major question remains: How do I grow my idea and more concretely, how do I fund it? You may not have needed lots of (external) funding until now, but that could change once you start growing.

This workshop will focus on the basics of start-up funding - we will present a Venture Capital market overview, explain and discuss the two "pure" funding strategies (Bootstrapping and Fundraising) and give you some ideas on funding options for early stage start-ups. This basic workshop will be continued in the REACH Incubation program.

https://s3-us-west-2.amazonaws.com/secure.notion-static.com/16076797-5a19-444a-837d-ccf42bf309d3/12_Funding_Basics.pdf

12_Funding_Basics.pdf

Additionally, we prepared an Excel example for you that includes

• A simple Fund Model: this will help you understand how a Venture Capitalist looks at investments into start-ups. Numbers reflect a fund that focuses on Series-A investments
• A simple Dilution Model (not used in this workshop): An example of a start-up that raises multiple funding rounds. Shows how the ownership of the founders goes down with every round (assuming that ESOP comes from founders stock)
• A simple Exit Model (not used in this workshop): An example of the same start-up that is acquired by a large corporation. It shows how the returns differ for the owners of the start-up

Investor CF Example.xlsx

🍪 Takeaways (After the workshop...)

• Bootstrapping:

  Works well for businesses that...:

  • Need low amounts of start-up investment
  • Have a low burn rate
  • Generate cash quickly
  • Have a proper business plan
  • Control their cash flow
  • You can grow as a part-time founder

• Fundrasing:

  Works well for businesses that...:

  • Need high amount of start-up investment
  • Have a high burn rate
  • Cannot generate cash immediately
  • You can only grow as a full time founders
  • you need to have a propper business plan and a good handle of your cash flows

• Relevant for both: Public grants and scholarships, company builders, accelerator programs, pitch competitions, crowdfunding, loans ….