Connect with us

Business Finance

How raising seed funding in 2016 is far different than it was in 2010

(ENTREPRENEUR NEWS) While it used to take weeks or months to raise seed funding, now it can happen in a matter of days. But can startups keep pace with the demand?

Published

on

seed round

Planting seeds that grow

How things change! In the US, the seed-fund process has changed dramatically over the last two decades. In Europe the startup landscape is even more dynamic and challenging. Seed funds exist throughout most of the European Union with estimates of about a billion Euros available to invest in startups.

bar

It’s a process

Starup investor Philipp Moehring condenses the [long] process involved in taking a startup from its crude beginnings to something worth taking a risk on. Along the way there are many twists and turns and the need to stay focused is paramount. What’s interesting is that on the other side of the pond (here in the US), the startup procedure is not that radically different. We’ll get to that in a minute, but first an overview of the Euro-UK version of startup fund raising:

  • Come up with the idea.
  • Build the prototype.
  • Build a fan/user base of at least 1,000 to test the prototype.
  • Network to get in touch with angel investors; ask them for advice, input, contacts and other help. Engage people you’ve worked with before and get them on board for a small investment first. First round of seed funds would be 100–250K, all from private individuals, in 10–50K chunks. Investors would be from across Europe, so as to build an international company, and a local helping hand is always good.
  • Incorporate the business for little to no money with a friendly lawyer.
  • Raise a seed round with 100,000 in revenue or users (Euro, and active).
  • To raise an institutional Seed round with a capital S, pitch the many great institutional seed investors across Europe. With the above metrics, raise 750K to 2M.
  • Marketing and customer acquisition will now be in focus. Aim for 2 million users or revenue on this round and put serious thought into the business model, engagement metrics, and growth.

Meanwhile, back at the ranch

According to First Round, “seed funding is more plentiful and easier to raise today than ever before.” But there are also more startups than ever before as well.

Case in point: “If you have 4x the number of companies with seed funding, that’s 4x the players competing for the same money… making it 4x harder to raise an A round than it was five years ago.”

First Round recaps the following:

  • To avoid the crunch (see above); only start a Series A fundraising process after you’ve hit major milestones. Starting too early can be very risky.
  • Take your time during your seed round to choose the right investors who will help you raise the next round.

While it used to take weeks or months to raise a seed round, says BizJournals, some rounds get raised in a matter of days. Incubators and accelerators are pushing out larger numbers of companies and  many are getting term sheets within hours of walking off the demo day stage.

The real danger with pitching earlier than you planned confirms both BizJournals and Medium – you probably haven’t hit the right milestones yet and haven’t had the time to set up a fundraising strategy.

#2016Funding

Nearly three decades living and working all over the world as a radio and television broadcast journalist in the United States Air Force, Staff Writer, Gary Picariello is now retired from the military and is focused on his writing career.

Business Finance

How small companies can compete with free shipping

(BUSINESS FINANCE) When running a smaller shop online, how can you compete with free shipping from giants like Amazon that can afford it?

Published

on

shipping boxes

It’s hard enough for small businesses to compete with big retailers. But online shops also have to consider the additional cost of shipping. With stores like Amazon and Walmart.com offering very cheap or even free shipping, how is a smaller shop to compete?

Shopify, an e-commerce platform for online shops and point-of-sale-systems, posed this question to Thea Earl, product manager for Shopify Shipping. On the AskShopify blog, she offered some tips for managing shipping costs.

First, Earl points out that while “free shipping is an excellent marketing tool,” if you can’t afford to offer free shipping, it helps to offer a “really clear flat rate.”

Customers who think they’re getting a good deal may balk if they’re surprised by an exorbitant cost to ship. If you can consistently offer a flat rate, and let the customer know right off the bat, they’ll “know what to expect when they hit checkout” and won’t get sticker shock at the last minute, causing cart abandonment.

If you want to offer free or very cheap shipping, consider raising the prices of your products, even by a dollar or so, to help cover delivery costs. Note the ratio between the profit margin and the cost to ship.

Perhaps for highly profitable items, you can afford to absorb the shipping costs, while slightly raising the prices of less profitable products to offset the balance.

Lastly, Earl realizes that small business owners have no control over whether or not a carrier raises its prices to ship.

You do, however, have control over the packaging. Be smart about the types of packaging you use. Measure products and buy envelopes and boxes that are just the right size to save money on weight.

Paper and poly envelopes are lighter, and therefore usually cheaper than cardboard boxes. Also, Earl points out that most carriers have at least a few options for free packaging. Utilize these free options whenever you can.

And of course, you could always join a group like Shopify to take advantage of their bulk mailing partnerships with carriers like UPS, USPS, and DHL.

Continue Reading

Business Finance

Expense reports suck, but AI could make them less tedious

(BUSINESS FINANCE) Expense reports suck. There’s no other way to describe them. Here’s a way to make the process suck less. Thanks, robots!

Published

on

expense reporting expense reports fyle AI

A few years ago, I worked at a law firm doing clerk work during college breaks. One particular spring break, I found myself in a fluorescently lit office with zero décor, tracking expense reports. The whole break I sat there and wondered what I had done in a past life to deserve this nonsense.

All joking aside, expense reports are super boring. They just are. But, they are necessary to make sure that everything is on the up and up.

While going back and forth with my highlighter, crossing all of my T’s and dotting my I’s, I couldn’t help but think that there had to be a more efficient way to do this. Apparently robots were reading my mind, as there is an AI that now exists to expedite the expense report process.

Fyle is artificial intelligence powered expense tracking and reports. With everything from e-receipts to physical bills, Fyle’s technology tracks expenses and reports accurately in real time. This allows users to organize and manage all of their receipts and reports in a simple way.

Fyle comes with a pleathora of features, including: automatic data extraction, automatic policy enforcement, real-time expense visibility, dynamic approval system, custom approval hierarchy, third party APIs, trip authorization and requests, multi-country and multi-organization setup, and automatic account syncing.

With this, Fyle’s automatic reporting allows expensing to happen in one click, right within your email (via Fyle’s email plugin). Also, Fyle’s Policy engine determines expenses that require review and approval based on your expense policies.

For team friendly use, you can sync your corporate card transactions and auto match expenses that have been “Fyled”. You then receive real time visibility of receipts submitted against the transactions that were made. Fyle also allows for users to send in trip requests to receive authorization (equip with budgets, additional requests for flight, hotels, advances, etc.)

One important aspect of Fyle that can be an issue for a human is that it employs a method of duplicate detection. That way, every expense and report is one and done.

While this may be a helpful assistant in expense tracking and reporting, it’s always best to have a real set of eyes to check everything for accuracy.

Continue Reading

Business Finance

Free Bitcoin basic courses where no one will sell you any scams

(BUSINESS FINANCE) Bitcoin and other cryptocurrencies are booming, and it can be overwhelming, especially with all of the scams floating around. Here are some scam-free courses for free.

Published

on

free bitcoin classes

If you’re a regular reader here, you’ve probably gotten used to seeing news about Bitcoin, other cryptocurrencies, and blockchain just about every day. And if you’re anything like me, you may be scratching your head and feeling a little confused about it all.

Perhaps you’re thinking about investing in cryptocurrency, but need to know more. Or maybe you’re baffled by the basics, and just want to understand what it’s all about.

Fortunately, there are some opportunities to learn about Bitcoin for free – we’re talking about actual classes, not just a random Google search or two.

One of our faves is 10 Days of Bitcoin, which offers free email courses. The ten-day course syllabus includes overview classes like “The History of Bitcoin – A Unique (and Hard to Believe) Origin Story,” and “What is Bitcoin and What Makes It Different,” as well as classes with practical information for getting involved, such as “How to Get Your First Bitcoin, Safely and Securely,” and “Investing in ‘Initial Coin Offerings’ (or ICOs) and How to Avoid Scams.”

The course was created by John Saddington, a developer/entrepreneur who “desperately desires more people to become ‘tech literate’ and expand their own opportunities through software.” Saddington designed the class after having the same conversations over and over again with friends and family who asked him for explanations. The course is a great overview for folks who don’t really know much about the cryptocurrency and want a place to start learning.

For a more in-depth examination of the top dog of digital currencies, Princeton also has a series of 60 lectures, ranging from two to 28 minutes, that dives into the technicalities of cryptocurrency. These lectures are available on YouTube. In addition to a general overview, this series also looks at the “Mechanics of Bitcoin,” mining, and the “Future of Bitcoin.” It also places cryptocurrency in the context of “Community, Politics, and Regulation.”

With crypto on the rise, it may one day become part of regular course curriculums in high schools and colleges. Until then, there are opportunities online to learn about Bitcoin from reliable sources who aren’t out to sell anything, but simply want to help laypeople educate themselves.

Continue Reading
Advertisement

The
American Genius
News neatly in your inbox

Join thousands of AG fans and SUBSCRIBE to get business and tech news updates, breaking stories, and MORE!

Emerging Stories