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Do you need Startup Programs?
Tech Gold Rush!
Believe it or not, we are in the middle of our second tech boom. Some call this the “Facebook Factor”. Every investor is looking for the next big thing, the next Facebook. The tech startup gold rush is on. It seems there is a perfect storm of opportunities, with so many talented people being laid-off, with information technologies making any motivated entrepreneur into an expert, and investors scouring for the next big thing. The question is, “Should I do it myself, or should I take on an investor?”. There is no easy answer; each business is different.
Organic Growth
Some startups want to grow organically (only grow with hiring based on incoming revenue). There are several advantages to organic growth over an investor-funded startup.
- The founder(s) can maintain control of all aspects of the company.
- The ability to stay in stealth mode until you are ready for the marketplace.
- You can operate under a simpler Limited Liability Company, Sol-Proprietor or Partnership agreement.
- When your payday comes you will have a 100% share of profits.
- No oversight or compliance issues.
These are just a few of the reasons to reject outside investors.
Investor Growth
Others believe that taking an investor can help overcome the startup growing pains. If your idea is sound then extra capital can only help bring your idea to the marketplace, faster, with the needed staff, and your technology/infrastructure in place.
- Investor capital can help you bring your idea to the marketplace faster.
- It gives you the opportunity to hire employees as needed.
- You can buy/lease office space.
- You can set up the proper information technology.
- Many investors offer professional guidance and structure, i.e. deadline, for better or worse.
- Give your company credibility in the marketplace.
There are no right or wrong answers
every startup needs to find what is right for them. Before you make your decision it may be worth doing some research.
Here is a list of some seed capital funds. Seed capitals essentially give you the guidance and opportunity to refine your business plan and prepare yourself for your first round of Angel capital.
Y Combinator
(YC) as it is known in the tech circle, takes two classes a year of about sixty startups, offering the startup a very valuable opportunity. If you are one of the lucky 3% that get in:
- You are able to vet your idea;
- They will help incorporate your business;
- They will give your company some modest seed capital, averaging around $18,000;
- Mentor you through the first three months of your startup;
- Set firm deadlines, and launch dates;
- Give you an exclusive network of startup entrepreneurs;
- You get access to Demo Day, where they introduce you to some of the most influential people in the tech community and investors.
They will do all this for a small piece of your equity. For more information go to Y Combinator
500 Startups
is a seed accelerator primarily focused on internet startups. They provide guidance, capital, and networking for internet startups. They provide between $10,000 and $100,000 depending on your needs. For more information go to 500.co
Startup Programs can bring your startup into the limelight. The true value of these programs is the connections they give you with investors. This firm has worked with companies for all major accelerators.
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