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    4 Replies Latest reply on Jan 5, 2010 6:45 PM by phanio

    Whats the best way to find funding?

    Secretjade Wayfarer
      Hello all,

      I'm the CEO of a software startup in Virginia. We have a great concept and business plan developed but are in need of 5-7 million in funding to push it nation wide.

      What is the best way to find funding? I've searched many sites looking at VC, angel investors and other loan options but I'm hesitant to put time and energy into something that could turn out to be a scam or just a waste of time.

      Does anyone have any success stories? Or can you point me to a place where I can connect to real investors?

      Thanks so much!
        • Re: Whats the best way to find funding?
          DomainDiva Ranger
          I am going to try and answer ... again.

          Are you sure you need 5-7M? Our spreadsheet looked about like that when we first started, however, we have scraped by on 200,000 from an angel and monthly funding by me still working a real job and developing as well while my team works the design and technology.

          You can try Hunt Ventures online and garage.com. These are the two best, most honest VC sites out there.

          Good Luck. DD
          • Re: Whats the best way to find funding?
            DomainDiva Ranger
            Who is your domain expert? Do you have someone with a legal background and do you have someone to manage the knowledge engineering?
              • Re: Whats the best way to find funding?
                Secretjade Wayfarer
                Thanks for all the input.

                Currently, I have two other partners; one is a lawyer and the other is a mathematician/physicist. Together we have a pretty solid team but we are looking for another member with a love for software. Two of us have some programming experience but it's not our love and we want a person who loves what they do.

                The funding reality is 4 million to finish development and implement an aggressive sales strategy. We're starting at 5-7 to give the other party(s) something to work down to. Easier to work down than up. One of the things we are hoping to do is run an aggressive program, bootstrapping as much as possible but really being aggressive. We are also looking into the loan option but that will only get so far.

                We do have a pretty solid (IMHO) business plan but I'm hesitant sending it to someone over the net, without a nondisclosure. We are currently working on an operating plan and a 7 year projected budget.
              • Re: Whats the best way to find funding?
                phanio Pioneer
                Couple of ideas for you:

                First - good to see that you have thought through your management team and understand core competencies.

                Second - most investors will not sign NDAs. They don't do so because they could talking with you as well as someone else in your space and a NDA would stop them from doing that. There are other ways to protect your idea than NDAs.

                Thrid - most investors do not like to be marketed to directly. Mot like to get referrals from people the know and trust or have worked with in the past. My suggestion would be to focus on these gatekeepers and not directly the investors. In your search, you find a VC you want to work with - look at their portfolio and try to contact those groups. if you can get an in there - they can make the introduction. Other ways are to find CPAs, Lawyers or other business owners who know and work with the VC.

                Fourth, don't forget about Small Business Investment Companies (SBICs). Go to the SBA web site (they partner with the SBA) and search for SBICs to find more informaiton.

                Lastly, know this - this is a hard funding time. Most investors are merely hand holding their portfolio companies and not looking for new investment. Currently there is no exit for them as the IPO market is closed and M&A seems to have fallen off a cliff. But, that does not mean it is not impossible. But, investors today are looking for track records - meaning they want to see revenue or contracts in hand or something. Make sure you have something in hand when you pitch.

                Business Money Today