Questions you should ask a venture capitalist
It's not just you to be examined in relationship to someone who has the money you want to get your business - you must also examine those who want to invest in the company (many forget to review the investor in pure delight that someone believes in them).
Money is good, but it is also important to find out who is behind the money and what you can expect from them. You do not want an over-controlling, cowardly and pushy investors in your company because you will lose the urge to time.
Here are the questions you should ask a venture capitalist:
Why would you invest in this company?
What are your resources besides money that can help the company forward and how do you like us to use it?
What part of this company do you most?
What other kind of business you have invested in the past?
Is it okay if I contact the other companies you invested in?
How quickly do you expect to get results from your investment?
How would it affect you if you lost money you invest now?
If you knew that I was not able to build this company to the level you want, what would you do?
How do you see in front of you that decisions are taken and by whom?
What role would you have in your company?
These questions are important to you to get the answers. Sure, you need the money but you do not have headaches every day if he who pays the money is completely wrong person for your company.
Wednesday, October 20, 2010
Tuesday, October 19, 2010
Business Angels - are they?
An angel investor is a private person who invests capital and expertise in unlisted companies. Affärsängelns goal is to develop the company so that it becomes attractive to private equity firms and other buyers. Often avoids business angels to advertise their existence. They might otherwise be overwhelmed by requests. Therefore we are often in touch through various types of personal or formal network.
How will you find an angel investor and the manner in which you must prepare yourself?
• Be in good time if you foresee a situation of increased demand for capital in the business. There is no good starting to negotiate with an angel when the liquidity crisis is a fact.
• Some ways to find business angels is to participate in the CONNECT activities, contact the Swedish Venture Capital Association, your bank or accountant.
• The business plan is an important document when the risk the investor should assess your business. Customize it so that the reader can judge the potential, risks and potential for good business at risk the funding of the company.
• Emphasize and describe the people who are in and around the company. Business angels are much more focused on you as an entrepreneur and your environment than what the banks are.
• Before you connect you should examine the nature of the business as a business angel specialize. It is of course preferences on sector, geographic location and size but also the phase in the life of the company that the investor prefers to invest in.
• Remember that you are the business angel offers a business opportunity. It is you who sit on company growth and thus has better hand for the negotiations.
• Perform a self assessment of the company so that you get a picture of what is reasonable requests when to initiate negotiations.
An angel investor is a private person who invests capital and expertise in unlisted companies. Affärsängelns goal is to develop the company so that it becomes attractive to private equity firms and other buyers. Often avoids business angels to advertise their existence. They might otherwise be overwhelmed by requests. Therefore we are often in touch through various types of personal or formal network.
How will you find an angel investor and the manner in which you must prepare yourself?
• Be in good time if you foresee a situation of increased demand for capital in the business. There is no good starting to negotiate with an angel when the liquidity crisis is a fact.
• Some ways to find business angels is to participate in the CONNECT activities, contact the Swedish Venture Capital Association, your bank or accountant.
• The business plan is an important document when the risk the investor should assess your business. Customize it so that the reader can judge the potential, risks and potential for good business at risk the funding of the company.
• Emphasize and describe the people who are in and around the company. Business angels are much more focused on you as an entrepreneur and your environment than what the banks are.
• Before you connect you should examine the nature of the business as a business angel specialize. It is of course preferences on sector, geographic location and size but also the phase in the life of the company that the investor prefers to invest in.
• Remember that you are the business angel offers a business opportunity. It is you who sit on company growth and thus has better hand for the negotiations.
• Perform a self assessment of the company so that you get a picture of what is reasonable requests when to initiate negotiations.
How do you fix bank loan for your business
If you intend to borrow money in a bank so it is important that you prepare. Banks are not lending venture. Banks want to be 100%, or better still 150% confident that you will pay back what you borrowed and that they make money at the same time. The bank will want to have good collateral, such as mortgage on your property, securities, bond. They will also evaluate you as a person and look very closely at your business. Start by going to your own bank, but do not just with it. Examine many banks' conditions before you decide. It is easy to feel small in contact with the bank but keep your head high and was cocky. Remember that they do not lend money to be kind to you. They do it to make money and they will require you to pay on time, whether your business is going well or not.
Questions they may ask:
What if ...:
You do not sell as much as you think?
You get sick?
Customers do not pay?
Suppliers do not give any credit?
A large customer switching supplier?
If you get questions like this, you've hit on a good bank that will help you in your business. Unfortunately you can not count on the bank's staff are so involved. Often, they are like most people are quite afraid of making mistakes. They are making the most of templates and your job is not to miss a small detail that can make them uneasy when they sit in the meeting with the data they have received from you.
Come to the bank meeting:
The telephone number of references they can call.
With a clear business plan that you can inside and out.
With a marketing plan that you can inside and out.
With an investment plan.
With a starting budget.
With a clear rationale for why they should believe that just you will get through this.
With plans of cooperation with others.
The collateral for the loan.
With future plans for the coming year.
Whole, clean and neat.
There are two different types of credit you can get at a bank:
Investment Credits
Money for machinery and equipment.
Operating Loans
Check Credit used in support of your business operations. A certain amount, ex. 100 000 is always available on your account for higher costs. You pay for the opportunity to spend the money and if you use them, you pay interest on the amount you use.
If you intend to borrow money in a bank so it is important that you prepare. Banks are not lending venture. Banks want to be 100%, or better still 150% confident that you will pay back what you borrowed and that they make money at the same time. The bank will want to have good collateral, such as mortgage on your property, securities, bond. They will also evaluate you as a person and look very closely at your business. Start by going to your own bank, but do not just with it. Examine many banks' conditions before you decide. It is easy to feel small in contact with the bank but keep your head high and was cocky. Remember that they do not lend money to be kind to you. They do it to make money and they will require you to pay on time, whether your business is going well or not.
Questions they may ask:
What if ...:
You do not sell as much as you think?
You get sick?
Customers do not pay?
Suppliers do not give any credit?
A large customer switching supplier?
If you get questions like this, you've hit on a good bank that will help you in your business. Unfortunately you can not count on the bank's staff are so involved. Often, they are like most people are quite afraid of making mistakes. They are making the most of templates and your job is not to miss a small detail that can make them uneasy when they sit in the meeting with the data they have received from you.
Come to the bank meeting:
The telephone number of references they can call.
With a clear business plan that you can inside and out.
With a marketing plan that you can inside and out.
With an investment plan.
With a starting budget.
With a clear rationale for why they should believe that just you will get through this.
With plans of cooperation with others.
The collateral for the loan.
With future plans for the coming year.
Whole, clean and neat.
There are two different types of credit you can get at a bank:
Investment Credits
Money for machinery and equipment.
Operating Loans
Check Credit used in support of your business operations. A certain amount, ex. 100 000 is always available on your account for higher costs. You pay for the opportunity to spend the money and if you use them, you pay interest on the amount you use.
Project Finance - so please be aware
Project Finance - so keep your budget
There is nothing easier than to exceed the budget when you have projects and there is nothing harder than having a sensible project finance to support the project. Why you should now get tips on how you can think of to get the project budget to match with reality.
First in new projects, it is crucial how you start. Before you spend money on things it is desirable to explore the experiences of others in the case studies and surveys. If this type of investigations are, you are automatically a head start on your project economics.
Second review what you do and why you should do it. It can be stressful parts of the project that you do not need. Make sure that each part contributes to the final result and are not included because someone just wants it in general. Everything must be justified.
3rd Evaluate each part of the project both for what part provides as well as what it costs.
4th Beware of what you're saving money. It is easy to cut costs and not bother to take things because they are so far in the future. It may have the skills to do. You may want to carve out an external consultant to you "certainly can do it there themselves." Cut the cost but was sure that "you can do it themselves". If you do not, it costs rather than savings and it is of course poor project economics.
5th Teach everyone involved in the project of a great economy. It should be everyone's responsibility to ensure that the budget is not only a project manager.
6th Break down the project into smaller and therefore more hanterbarara economic elements. It does not have a lump sum of money as you lose control then. Project Management is about ensuring that everyone takes care of the economy in the project. If part one is 200 000 so it must cost 200 000 despite the fact that the entire lump sum is 2 000 000. Let people take responsibility over their own parts economically.
7th Update all concerned about the economy in a way that everyone understands. No hassles here. This is the cost and this has left us. All parts that have their own persons responsible for project finance to be able to say immediately how they are doing (even if they are awakened at 03 00 at night).
8th Make sure your project manager and responsible for project economics are simple ways of communication. The planning project economics can not sit in a hole for himself.
9th Establish simple way to warn when things happen that entail greater costs. The project members are quick means that alternative solutions are easier to find the more time you have for it. If you do not have the time and have to buy a solution right away so it will usually not be neither the cheapest nor the best.
Project Finance - so keep your budget
There is nothing easier than to exceed the budget when you have projects and there is nothing harder than having a sensible project finance to support the project. Why you should now get tips on how you can think of to get the project budget to match with reality.
First in new projects, it is crucial how you start. Before you spend money on things it is desirable to explore the experiences of others in the case studies and surveys. If this type of investigations are, you are automatically a head start on your project economics.
Second review what you do and why you should do it. It can be stressful parts of the project that you do not need. Make sure that each part contributes to the final result and are not included because someone just wants it in general. Everything must be justified.
3rd Evaluate each part of the project both for what part provides as well as what it costs.
4th Beware of what you're saving money. It is easy to cut costs and not bother to take things because they are so far in the future. It may have the skills to do. You may want to carve out an external consultant to you "certainly can do it there themselves." Cut the cost but was sure that "you can do it themselves". If you do not, it costs rather than savings and it is of course poor project economics.
5th Teach everyone involved in the project of a great economy. It should be everyone's responsibility to ensure that the budget is not only a project manager.
6th Break down the project into smaller and therefore more hanterbarara economic elements. It does not have a lump sum of money as you lose control then. Project Management is about ensuring that everyone takes care of the economy in the project. If part one is 200 000 so it must cost 200 000 despite the fact that the entire lump sum is 2 000 000. Let people take responsibility over their own parts economically.
7th Update all concerned about the economy in a way that everyone understands. No hassles here. This is the cost and this has left us. All parts that have their own persons responsible for project finance to be able to say immediately how they are doing (even if they are awakened at 03 00 at night).
8th Make sure your project manager and responsible for project economics are simple ways of communication. The planning project economics can not sit in a hole for himself.
9th Establish simple way to warn when things happen that entail greater costs. The project members are quick means that alternative solutions are easier to find the more time you have for it. If you do not have the time and have to buy a solution right away so it will usually not be neither the cheapest nor the best.
Cash at start of business
I often meet aspiring entrepreneurs who want to avoid all types of loans and debt. Sometimes they have their own start-up capital, which they plan to use without consulting a bank or other financier. Always My advice, they should consider capital need a yard to. In most cases, needed at least an overdraft facility, an account with the ability to borrow, if necessary, when expenditures temporarily exceed expenditure. If you have an initial capital is great. Use it to get yourself room to maneuver. It's no fun having to contact the bank only when funds are exhausted. In most cases, cash flows even in a small company much more irregular than at a person. As an individual you get your salary a month on a certain date, which conveniently enough, usually matches the bills you must pay. Predictability is therefore good. With regard to your company, it may look quite different. You have expenses but may receive revenue until next quarter. Of course, you should limit your and your indebtedness. However, I have unfortunately seen too many businesses fall into insolvency because of illiquidity. No matter how good the idea you have and how much backlog that exists: it is your ability to pay bills and salaries, which is the difference between the roll forward or roll down into the ditch.
Calculation of capital
There are different models for calculating capital requirements. Since it is very different depending on what industry the company operates in, it is best advised to contact the trade association for the type of business you run or want to start.
I often meet aspiring entrepreneurs who want to avoid all types of loans and debt. Sometimes they have their own start-up capital, which they plan to use without consulting a bank or other financier. Always My advice, they should consider capital need a yard to. In most cases, needed at least an overdraft facility, an account with the ability to borrow, if necessary, when expenditures temporarily exceed expenditure. If you have an initial capital is great. Use it to get yourself room to maneuver. It's no fun having to contact the bank only when funds are exhausted. In most cases, cash flows even in a small company much more irregular than at a person. As an individual you get your salary a month on a certain date, which conveniently enough, usually matches the bills you must pay. Predictability is therefore good. With regard to your company, it may look quite different. You have expenses but may receive revenue until next quarter. Of course, you should limit your and your indebtedness. However, I have unfortunately seen too many businesses fall into insolvency because of illiquidity. No matter how good the idea you have and how much backlog that exists: it is your ability to pay bills and salaries, which is the difference between the roll forward or roll down into the ditch.
Calculation of capital
There are different models for calculating capital requirements. Since it is very different depending on what industry the company operates in, it is best advised to contact the trade association for the type of business you run or want to start.
Solidity
The equity ratio is about a company's ability to pay in the long run. The word itself comes from the word "solid", that is fixed, which gives an indication of what this is about. High solidity means that there is wealth in the company. It can be real estate, securities and other assets held in the plant for longer. This property is normally not something you use to pay the regular operation. High equity ratio is very important when you are going to convince financiers to lend money. It reduces their risk if your company goes bankrupt. Unfortunately, the offers start-up companies rarely show any equity to speak of. This means that you must convince the financiers in other ways.
The equity ratio is about a company's ability to pay in the long run. The word itself comes from the word "solid", that is fixed, which gives an indication of what this is about. High solidity means that there is wealth in the company. It can be real estate, securities and other assets held in the plant for longer. This property is normally not something you use to pay the regular operation. High equity ratio is very important when you are going to convince financiers to lend money. It reduces their risk if your company goes bankrupt. Unfortunately, the offers start-up companies rarely show any equity to speak of. This means that you must convince the financiers in other ways.
cap
Capital
There are different types of capital:
• Short-term capital needs is the availability of cash as the company needed to cover the interim payments to suppliers, salaries, etc.
• Long-term capital needs is the availability of cash as the company needed to manage the necessary investments in product development, marketing, machinery, buildings and other fixed assets.
• Security Capital is the extra buffer that the company needs to manage any disruptions in ongoing operations, such as a major engine failure or a temporary dip in sales.
Liquidity
The concept of liquidity comes from the word liquid, ie liquid, which also gives a hint about what this is about. In contrast to equity ratio as is the liquidity of money used to pay bills, salaries and other expenses. Unlike the fixed assets, this is money that is readily accessible. This liquidity is not necessarily earned money but may well be some form of credit that you use to balance income and expenditure.
There are different types of capital:
• Short-term capital needs is the availability of cash as the company needed to cover the interim payments to suppliers, salaries, etc.
• Long-term capital needs is the availability of cash as the company needed to manage the necessary investments in product development, marketing, machinery, buildings and other fixed assets.
• Security Capital is the extra buffer that the company needs to manage any disruptions in ongoing operations, such as a major engine failure or a temporary dip in sales.
Liquidity
The concept of liquidity comes from the word liquid, ie liquid, which also gives a hint about what this is about. In contrast to equity ratio as is the liquidity of money used to pay bills, salaries and other expenses. Unlike the fixed assets, this is money that is readily accessible. This liquidity is not necessarily earned money but may well be some form of credit that you use to balance income and expenditure.
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