Ever wonder how to get money for your business idea?
One of the things I love about Utah is the abundance of competitive entrepreneurs. As one who has lived all over the US, Utah is truly special with the number of people willing to start businesses. Sooner or later, all these ideas need capital. Enter the topic of business funding. How do you get a group or individual to invest money into your company? What is the fairest way to compensate investors who risk capital for the idea? How do you structure the deal, so you still have enough upside while getting the money needed to grow the company?
The Silicon slopes movement is full of startups that have worked through these questions. The majority of them are c-corporations that use convertible notes or safe notes to raise capital. There are several investor groups, university or student-led funds, accelerators, and other funds that will prepare companies to find investors that are a good fit. The Grow Utah website is an excellent resource to understand more of this world and find the group that is right for you.
The guys at Advanced CFO, a Utah based CFO firm, recently put together an excellent summary of how these funding agreements are set up. Check out this recently published article Convertible notes, Safe notes, and revenue financing explained.
There is also something to be said for bootstrapping your startup. There are some considerable advantages to building the business on your own before approaching others for money. Revenue and profitability will significantly increase the interest of investors and drive up your valuation. Be sure to talk with some people who have gone down this path before.