How to: Raise Seed Capital

Easy steps I try to follow when raisng some bucks:

1. Do / develop your numbers for the next 3 years. Make it a monthly simulation so you can benchmark yourself each month and (if necessary) break it down to daily average numbers so you can put some pressure on you....

1.1. Base it on your sales simulation, revenue stream and expenses model
   1.1.1 Sales-Simulation base on some industry assumtions and averages
   1.1.2. Marketing Expenses (to generate your sales objectives)
   1.1.3 Fixed costs, office, etc. Expenses
   1.1.4 HR Expenses (dont forget to calculate your cost of living....)
   1.1.5 Logistics Expenses (based on what you sell)

1.2. Cash Flow Simulation based on the capital you need
1.3. Balance sheet for the next 3 years.

2. Know your numbers

2.1. Don´t oversell, creat milestones and be aware that investors will nail you down on your numbers.
2.2. Benchmark and make common sense assumptions (they will challenge you on that one)
2.3. Know your market & Biz Plan

3. Know your potential  investors

3.1. Don´t be afraid of investors, be afraid of them because they are humans and worried about their money. Report well to them and act pro-active
3.2. The less the better, Angels preferred, keep few interest groups
3.3. Don´t fight too much about the initial valuation and the share. Better having 20% of 1Million than 90% of crap. Ok, make it reasonable! Come on..dont nail me on this one.
   3.3.1 Letter of intent, Shareholder agreement whatever. Get a lawyer who looks at it.
   3.3.2 Be aware that their risk is higher. Worst case: 100% loss, you still have the free ride!
   3.4. Give them a clear idea of how to exit. Remember, they have a timeline....

THe lst thought on it: Keep your numbers uipdated. More that than the damn business plan. It changes all the time anyways....and gives a much better idea of how you tick than any 20 page exercise.

Cheers and have fun. M