III. Why do you need a business and do you really need an investor?

Chase the vision, not the money; the money will end up following you.

– Tony Hsieh, Zappos CEO

Let’s start with the basics. Sometimes startup entrepreneurs get lost in them at the very beginning of their journey. In my opinion, there are a few of the most important questions we need to ask ourselves about our business operations when we are just setting up a startup.

Question 1: Why do I want to start a business? What motivates me?

You need to answer these questions for yourself before continuing to develop your business and decide how you will finance it: whether on your own or with an investor. When you consider inviting (or letting) an investor into your company, go back to the initial moment the one when the thought of your own business first occurred to you and ask yourself why you wanted and still want to create this company.

Why do you need a business?

Research shows that in most cases money and getting rich are not the goal of starting a business at all (or at least not the primary goal). Yes, money is on the TOP10 or even TOP5 list of arguments why people want to run their own business, but it never comes first.

The results of various studies conducted in the field of entrepreneurship indicate that the need for independence and self-reliance is the main reason why people start companies. Other factors such as the need to earn more; to improve one’s status in life; to be one’s own boss; to do what one loves, or to spend more time with one’s family are further down in terms of motivation to open their business.

If you ask entrepreneurs why they started a business, very often you will hear that they were driven by the need for freedom. People want to be able to decide for themselves, what they do, and when and how they do it. They don’t want to work for someone else, they prefer to be their own shafem. And here comes the first warning light: if this is also for you the main reason for doing business, then know that inviting an investor with capital into your company does not go hand in hand with freedom.

Suppose you open a company because you dream of working on your own terms. This is possible as long as you manage this company yourself and invest in it yourself. It is very important to understand that with acquisition of an investor, the business will be joined by an entity that will want to know what you are doing, how and when you are doing it, what you have in your plans and why it is all going so slowly. He or she will expect reporting and maybe even (almost certainly) the ability to hound you and influence the on your decisions.

This is because the investor (whether in the form of a fund or a business angel) gains a stake in the company, and therefore becomes your partner, to whom you must start reporting in addition to which you answer to him. You are taking responsibility for someone else’s money, whose owner will want to know what is happening with it. For him it is not a support or an ordinary expense, but an investment from which he expects a certain level of return, and additionally he does it with certain assumptions (e.g. time).

Besides, even the very acquisition of financing requires presenting to potentially interested parties what our business idea is, what strategy we intend to adopt, how we want to implement it and what budget we have for it (that is, how much money we need, how much we are going to spend and how we estimate the effects that this spending will bring). The fund decides to enter a given investment, taking these aspects into account. If everything goes according to plan, chances are that the investors’ interference will remain low and you will basically feel as if you are still your only boss. The situation is worse when reality starts to diverge from the plans and this happens very often.

Let’s take such an example: I assumed in my plans that if I spend 50 thousand on marketing, I will have 100 thousand revenue. On the other hand, the reality may be that I spent 50 thousand on marketing, and I have 30 thousand in revenue. I did everything I committed to, but the result is different, and because of this I have to start explaining myself. There are additional questions, and often objections to the quality of my work and the legitimacy of the decisions I made. In addition to explaining myself, I also have to present a plan for how I will change the situation. I am required to explain how I will now manage in order to fulfill what I promised the fund in the long term. Does it still look like I am my own boss?

Even if we set up a company because we plan to do what we want to do, and do it on our own terms, with the invitation of an investor to join the company, this independence evaporates. The argument about starting a business because of a sense of freedom begins to blur for us. Of course, in the rules of cooperation you can have it written in that you retain control of the business, because your angel takes only 10% of the shares for himself, and you have 90% of them, and you still make the decisions. VC funds will usually wanted more control, if only veto rights or a decisive voice in at least some matters. To one or the other, once in a while, you will have to report on what is going on, or take them into account in subsequent strategic actions, such as attracting other investors or selling the entire business.

As you can see, this is a far cry from the situation when you have 100% ownership and finance everything yourself. So, if the goal of running a company is for you to remain free and operate on your own terms, then getting an investor will not be a good way to go.

Case https://collectomate.io

DropByBox was supposed to be an app where you could track sports scores and share your experience with others present at the stadium. It was supposed to give us a better experience watching the games, as well as facilitate the logistics of ordering food to parcel machines (collectomats) during breaks.

The founders of this app had an interesting idea and quite a plan to implement it as they raised money from investors. I myself got involved in this project as a business angel, as did well-known people from the world of sports.

The idea seemed good, but for various reasons it was very difficult to sell it and build a company on this idea. At some point the question arose: what next? The conclusion was: we have worked out a lot of things, we have “something”, but it does not make sense to continue the project in this shape. So, what can we do with it? It turned out that the greatest resource, or “something we have,” was the logistics part, that is, the parcel machines and all the technology created for them, and therefore what

The company prepared on its own. After a lot of discussion and deliberation, it was agreed that it was necessary to do a so-called pivot, that is, to transform the original idea A into idea B (just pivot) and start implementing it.

Of course, the idea was not to build completely from, but to use the most important resources and create a new idea based on them. Idea B came about as a result of the experience we gained along the way when we tried to sell the existing idea to stadiums. So, a pivot is not just a change in budget or in assumptions about the segment of our product’s target customers or the form of distribution (e.g., a change from offline to online). It’s a complete change in the product offered. In this case, the company stopped offering a sports app and started doing something completely different in a completely different market. The new idea was based on offering the created parcel machines and technology as a solution for offices, e.g. streamlining the delivery of corporate and private parcels and the internal transfer of documents. In that case, the product is different, the customer is different, the market is different too and that’s the pivot.

So, what if I want or need to change the premise of my business? Let’s start with the fact that if you create the business yourself, it will be relatively easy to makeno such change. It may even happen that your preferences or interests are modified. It may also be that, operating in one area, you will begin to see new opportunities where you have not seen them before. As self-reliant entrepreneurs, you can switch to new solutions quite efficiently.

The matter gets complicated when you have an investor in your business. If someone has placed money in your company so that you conflict of interest pursue idea A, in turn, you say that you will no longer do so because you have idea B, then… think for yourself how you would react as investors. The situation is much more complex in this case, because in addition to the fact that you are faced with switching your company to a new track, you first must “sell” this idea to investors, or at least try to show them your perspective. If you have unfavorable people on the board of the company or the wrong investors, this can become a very big problem. In many investment agreements, even when the VC fund has a minority stake, there is a provision that you can’t change the business without their approval. In a word you will lose flexibility, which is a valuable feature in the market.

In addition, you may find that in wanting to change your industry, you will encounter a conflict of interest, because, for example, an investor or business angel will already have funds invested in a competing company. You will want to make the change, but the investor will not agree to it.

In addition to asking why you want to start a company, it is worth considering how you want to operate.

Question 2: What are my ambitions for my company? How do I want to realize them?

It may seem that the answer will be obvious. Visions of what the company should look like, how it should operate, how many people it should employ, whether it should operate globally or more locally, etc. however, there are usually plenty. Indeed, there are different ways to run a business.

On the one hand, many examples show that people want to build multinational corporations, run global businesses and be fulfilled in this. They have ambitions to build large structures in companies and hire more employees. They create very developed and complex ambitions organizations, with thousands of people on board. On the other hand, we have people who care about running a small and flexible business. They don’t want to build large structures or global networks. They opt for a smaller team, outsourcing and more business agility. Very often in this way they ensure a lighter lifestyle and less corporational work. So, what vision you have for your business (and personal life) will determine what direction it will be worth developing it in and when to consider an investor’s presence in the company if at all.

However, there is another, very fundamental issue. A complicated structure in a company is created not with 100 employees, not with 50, but already when there are only 7-14 people in the company. This is the moment when many things start to get complicated due to the changing dynamics of people and teams and the complexity of managing them. Building a large business without the support of many people is insanely difficult. Usually, as the company changes scale and grows, you need to hire more people. There are, of course, methods that recommend outsourcing many activities. Tim Ferriss, author of the book The Four-Hour Workweek, recommends to outsource everything you can, and just manage it yourself. And thus work four hours a week. Either way, there are plenty of decisions to be made about what we want our business to look like and it’s worth thinking them through before we let anyone on board with his or her capital and vision for our company.

As I mentioned, it turns out that money is not the main motivator for people in the context of running a business. They are important because they provide a measure of performance (after all, we are running a company, not a foundation or association), but it is not the most important motivator for founders.

Interestingly, most people, once they cross the threshold of $80,000 in private income per year, enter a level where more money has very little meaning. This may seem strange, especially since in Poland $80k is a perceptibly larger amount than in the US, for example. The point is that at a certain financial level, we have all our basic needs met. It is also likely that we have already fulfilled our personal dreams or cravings (for some it will be a branded car, for others travel, for someone else clothes or high-end hobby equipment). If we then look at what makes us happy, we will find that greater wealth does not raise our level of ‘happiness’. There are, of course, things that we would probably like to own, but often it is simply impractical to buy them, especially since almost anything can be rented these days. Even from a financial point of view, the decision to buy certain things is irrational. If I would like to have a private airplane, and I count how much I fly, it would be much cheaper to rent it for every flight or buy topclass tickets than to own the machine. People who dream of acquiring such things as houses, airplanes, yachts, etc., often don’t realize that renting them simply comes out cheaper. It’s only after a certain financial level that we start looking for information on the subject, and it turns out that when we put our money on renting various goods, we spend less than on buying them, and therefore making more money no longer motivates us so much.

Let’s return to the topic of the financial level that gives a person a sense of happiness. When we have our basic needs secured at a satisfactory level, money becomes secondary. Other issues come to the fore. What makes people happy becomes a sense of development. For me personally, it gives me great joy when I feel that I am developing in various areas from playing the fortepia to being effective in being an entrepreneur. My wife rides horses, and every time she finds that she is getting better at it, her satisfaction grows. It’s not even about taking on more and more difficult challenges, but the mere fact that we become a little better at a particular thing.

The second element that makes us happy is a sense of control over our own lives that no one is forcing us to do anything. The more often we feel that we can make a choice at any time (e.g. thank the boss and go to another job), the more comfort we gain. It is related to the sense of freedom I have already mentioned.

The third element is a sense of doing something good, something bigger than yourself. When you listen to many entrepreneurs, you’ll see that their businesses were born out of a desire to solve someone else’s problem (very often their own something was bothering them in the world in which they operated). This can apply to a small community when I help a local shelter, but it can also be a global solution when I do something really big for the whole world. It matters less what it is. What matters is that I have a sense of doing something that is bigger than me.

At the beginning of the journey, money can be important to an entrepreneur, and it is the improvement of one’s financial situation that can be the motivation to move in the direction of starting one’s own business. However, these become secondary very quickly. An entrepreneur has so many obstacles in his way that one needs much more complex reasons to continue on this path. We will be much more strongly sustained by the original idea, an idea we like, or a sense of doing something good for the world.

You have to realize that an investor, when putting money into a company, expects a significant increase in the value of his shares. In a nutshell, the fund takes the money and is tasked with helping it live up. This will not happen through a single investment, because it would be too much of a risk. Therefore, it invests in many different companies and thus diversifies this risk. He knows that some of the companies will go bankrupt, some will come out plus or minus at zero, but there will also be some portion (not too large) of the companies that will grow enough to compensate for previous losses and give a high rate of return to those who put money into them. And it is from your startups that the investor will expect a quick return and the highest possible value.

Scaling or stabilization

If you want to build a company that gives you choices about how you live, how you spend your time, what you do, and that meets your basic needs, you don’t have to create a complicated structure or expand your business. Just stay with a small number of people on board. You don’t need to scale the business, but rather keep it at an appropriate level.However, if you decide to keep the business at one level, the value of your companies will not grow. The company may be valuable no matter how much but that value will be fixed, because you will not grow it. Examples of such businesses can be found at every turn, because most companies are small businesses that provide a living for their owners. Someone runs a hair salon, someone else has a restaurant. These are simple, smaller businesses that can provide a good living for the owner’s family. However, they will not result in a chain of restaurants or hair salons, because the proprietors do not want that. They value their lifestyle or peace of mind more than building an empire.

I am writing about all of this because it is extremely important (I will emphasize: EXTREMELY IMPORTANT) in terms of deciding whether to get an investor. Finding someone who wants to invest in our idea can be a sensational opportunity for growth, but it can also become hell for us, so you need to be clear about how you want to run your business.I’ve met a lot of startups who have an idea for a company, but when we talk about how they would like to run their business, they say that what’s important to them is lifestyle and ease, they want to be free to choose where they work from. That’s when I know that getting an investor will be a very bad solution for them. It’s those moments when we think we’ve met an angel (for our business), and we land in hell (of expectations, reports, working against our expectations, making business decisions for profit rather than for growth, and maybe even selling our beloved company). The investor will required an increase in the value of the company, and this means that we will have to develop it, expand the structure and complexity of this enterprise.It’s very difficult, and I don’t know anyone who is able to do it well while maintaining a relaxed lifestyle.

Question 3: Do I need an investor?

There are situations in which external funds become necessary. If we want to realize our idea, because we think that the product we invented should be made available to the world, and we are ready to develop it, then financing obtained from a fund may be the best solution.

Seeking an investor is also a good way to go:

If we are not afraid of a lot of responsibility for money not only our own, but also that of others;

When we have ambitions to build something bigger, and we want to give it a chance, and our project will not happen without additional funding;

When we don’t have a better alternative for financing the company’s growth.

I have observed many times people who immediately after creating a business go to the stage of wondering how they are going to finance their idea. I think this is far too early. The first question should be what motivates us to do it, and only the next one: do we really need to finance our project with external funds.

If the answer is yes, then the next question should be how much money we need. And only when we know how much money we need, we can think about how to raise that amount.

When I was mentoring budding entrepreneurs, supporting startups or meeting with potential startups who were looking for funding and in which I myself had invested, I often observed a pattern of thinking emerging in them: if we want to develop something and have need to fund it, we have to go to an investor. This results in entrepreneurs focusing on looking for an investor, instead of considering other options, acquiring customers, or simply developing their project on their own, and after all, there are many things along the way that they not only could do, but should do.

I meet with startups and hear that they have an idea, they coded something there and now they want to raise a million euros to develop it further. Very quickly it turns out that they don’t even know what they need that million for and why exactly that much. The behind-thescenes explanation is: ‘A million, because it sounds cool, well, and when you go to an investor, it’s for big funds. So, why not immediately for a million? After all, we would spend 100 thousand very quickly’.

First, such an approach is immediately apparent, and any good entrepreneur, business angel, and certainly a fund will verify it with just a few questions.

Secondly, it only confirms that the question, ‘Do I need to go to an investor?’ cannot be asked too early. We should first ask ourselves, ‘How much money do I need?’. Only when we know this, have everything counted, can we wonder how to raise these funds. After all, there are many ways to get money, and an investor is just one of numerous potential sources, and not always the best.

Conclusions:

Ask yourself why you are creating this particular business in the first place.

Determine your TOP5 reasons why you want to become a entrepreneur.

Think through what kind of lifestyle you want to live.

Learn the specifics of operating with investors.

Make how much funding you need for startup and initial development.

IV. Sources of funding for startups

We have an idea, we want to develop it and we need, for example, 100,000 EUR. What are the possible sources of funding?

1. Bootstrapping – own funds

Probably now many of you are thinking: well, yes, but first you need to have any funds put aside, and I am an unemployed student, I am supported by my parents, and even if I have a job, it is a casual one, possibly as a full-time employee, but from my salary I am not able to put anything aside. Your own funds are not necessarily what you have in your account today. If you need EUR 10,000 to make a prototype, and you don’t have that money, then find casual work, do online assignments, or start setting aside EUR 500, EUR 1,000 or more per month from your salary. Don’t quit your job just to take care of your project this way you will develop and finance your work in parallel.

This is how I financed many of my startups. I worked concurrently with my schooling and also during vacations. Later I was able to spend the money I earned on my startup and implement my own ideas. I described more than one such story in my first book The Power of Momentum. In a word I verified in practice that this is possible.

Yes, it may seem that it will take a very long time and that it is a difficult path. However, if you are not ready to make such sacrifice, then consider whether you really want to become an entrepreneur and face much greater challenges. It’s also a good way to verify whether or not you are suitable as an entrepreneur.

Your own funds give you the advantage that you then retain full control over your project.The fact that you do not obtain money from outside, but apply for it on your own, makes you dispose of it differently. Hard-earned money is spent with difficulty, and therefore often much more rationally. With such a strategy, you will look at every euro very carefully.

I once read a story of a billionaire from Asia, coming from a very poor family. His parents could not afford to send him to school, so he worked for a year to earn money for a dictionary. This enabled him to learn to write and read. He tried to gain knowledge on his own. To understand certain things, he wanted to buy an encyclopedia (those were the old days). He could afford it only after three years of work. Today he is a billionaire.

This is a very extreme situation showing that you can be successful even starting from complete poverty. You will find more such examples. Of course, then everything takes much longer, but it doesn’t change the fact that in this way you fulfill the dream of building your own business and realizing your idea.

I also remember one time I sold everything I had. I was living in Sweden at the time, so I listed things on Swedish blocket.se (the equivalent of eBay). I did a real cleaning – sold a lot of unnecessary items that was lying around and in the closet and that I didn’t use, etc. Check if you have such items at your place. If you get 50 euros, 100 euros, 500 euros or 1000 euros for the stuff, maybe more, you will be able to do a lot with this money.

An important thing that needs to be said: sometimes we think we need a million euros to take our idea a step further. And it may turn out that we only need 500 euro, to for example setup a website or online store.

We are a million steps away from realizing our own business vision from an idea to a big company. Sometimes we are stuck in the belief that if we get a million euros, it will be enough to put up half of them, or we will jump them all at once. But the truth is that we have to take that million steps one by one, and sometimes it’s lighter to move forward when we don’t carry the responsibility of a million euros. A sold watch that we don’t use will give us 1,000 euros that’s enough to take off and set the business machine in motion.

Case

In the book The Power of Momentum, I described my story related to the making of the TV program 72 Hour Race. At the time, I invented a lid for use in the microwave. In order to go from an idea to presenting it to a potential customer/buyer/customer, all I needed was a nice graphic design of my idea. How much would it cost today for a graphic designer to prepare one visualization of a product? Maybe even less than 500 EUR. If I had made a prototype on a 3D printer it would not have been a big amount either.

Visualizing an idea is a relatively small cost and effort compared to raising a million. Everyone should be able to raise the few hundred euros. If he can’t, the question is how he will cope with bigger challenges. Such visualization can be the key to further developing our idea.

In my case, things happened quickly. I went with a finished visualization of the product right away to the potential customer, and he said: I buy. No product, no prototype, no factory. There was nothing but an idea and its graphic visualization. At the time, I was not ready to unravel this project. Now I would probably act differently. This is an ideal situation, especially for a startup. As an entrepreneur, I hadn’t invested much yet, and I already knew that all I had to do was put up more money and create the product it was already sold. What’s more, I might even be able to get the customer to make a down payment. That way I would have the funds to start production, and in practice it would be the customer who would finance the start of my business. For the rest of the production, I would negotiate some kind of longer payment term (or installments) that would coincide with the payments from customers. In this way, subsequent batches of production could be financed from customer payments at the beginning. This approach would ensure that I would have a business that works, I would have a customer and, de facto, my only investment would be the cost of the visualization, which is a kilo-cash.

This is one of many examples showing that you can really go very far with very little money. Sometimes when I talk about this topic, I hear people’s doubts and fears related to the fact that if they show their idea to someone, someone will steal it from them. The truth is that the company that was interested in buying my idea then had the means to “totally eat me.” They could have done it without blinking an eye. Similar companies have so much financial resources that they would be able to prepare and produce everything themselves, but this is not their business. Very often they focus only on how to sell. If I come and say that I can provide them with a good product that has sales potential, I bring a to their company’s potential profit and I take the hassle out of organizing my own production, creating a product, etc. The fear that they will steal my idea is unfounded.

Idea theft

Most companies don’t have that kind of enthusiasm to suddenly change their business, steal mine, and get on with doing what I was going to do. They have their business strategy, their products, and they usually know what they’re really good at. The second thing: if someone likes my idea, they will still want to copy it sooner or later. So, what do I do when others start to duplicate my designs? I tell them and myself: congratulations. Think of it this way if something didn’t exist 2-3 months ago, and now people start copying it and selling it, then we are at the beginning of creating a market that is interesting and has the potential to grow. The product generates interest and there is a market for it. On the other hand, if no one copies it, then the question arises: why? In such a situation, I would lean towards the fact that there is unlikely to be a large market for what we offer. I would be more afraid that my product has no raison d’être than that someone will copy it. Because people will do it anyway. And if they start earlier, maybe we’ll mobilize to expand faster.

In any case, it usually seems to us that to make another step in business development, we need a lot more money than is the case. Usually, our project requires much less than we assume.We have an idea for a complex application and think we need to recruit programmers for half a million to build it for us. When we read books about the Lean Startup method and look at other examples, we will find that all successful ones prove one thing: entering the market with already developed and advanced products (programs, applications, physical objects) is a bad idea. It is better to go out to customers as soon as possible and verify the main assumptions of your idea. If possible show a prototype and see if the market is interested in it.

You can then gather feedback on it:

Whether the market really wants the product we created;

What is the reaction of the audience to our offer;

What our project lacks;

What the product would look like after the changes.

Maybe, too, thanks to information from the market, we will get a hint and a solution that we did not consider, because we do not look from the perspective of the customer, or we are not users of a given product. There are plenty of such examples: Facebook, Google, LinkedIn and all the big companies have tried different things. Not every assumption always works in practice. You have to clash with the market.

2. Prepayment from customers

This is another way to finance your idea. You got an example of what it can look like above. Pre-payment can be made by one large customer, but you can also collect orders from many people, informing them that the product will be available in a while.

3. Pre-sales

This is an increasingly popular way of moving forward with a business or new product pre-sales (in addition to providing us with funds) are great for helping to verify our idea at the initial stage and clearly show whether there is a demand for the item and whether we know how to sell it.

Such a product is, for example, a book. In the era of Poland’s burgeoning self-publishing market, pre-publishing is a common method of raising cash for the first print run and paying the cost of the preparation of the publication. We have the concept, we have the cover, we have already written most of it, but it remains to complete the technical issues, which costs a bit. Later still printing and shipping. Costs begin to rise, and it is the pre-sale that solves this problem. This method is used not only by startups, but also by large publishing houses. It’s worth watching them and learning from the practices of a particular market, because a book is just one example, and pre-sales can apply to virtually any industry.

Again, I’ll come back to the fact that we probably don’t need as much money as we imagine for a startup. Usually less is enough. Maybe this ‘less’ will be easy to get, for example, in a pre-sale as a down payment or partial advance from a customer. This will solve the issue of further financing and we will be able to complete the product, to deliver it to the customer.

4. 3F – Family, Friends and Fools

We can also obtain financing from friends or family. This is often not a formalized way. I would emphasize here, however, that if we turn to friends or relatives, we should raise the issue of high risk at the beginning for the sake of our relationship. It is worth talking about what you will do if you fail and the money is lost. Remember that we are probably talking about people who are not professionally involved in investing. I would like to make it clear that while money from people close to us is fairly easy to come by, you need to think about whether you really want to take it for a startup. In my opinion, it is not worth spoiling relationships with friends or family over a business failure.

If you do decide to do so, you must present the situation to them very clearly, including the option I mentioned assuming that they may never get the money back.

From the point of view of a business angel, I can confirm that I have friends who wanted me to invest in their startup. It was tempting, but in the end I gave up and never placed money in a company of people close to me. I felt that our relationship would be altered by this to my disadvantage. I only made an exception once and invested in my brother’s company, but I must emphasize that it took seven years before I made that decision.

Case

In 2012-2013, Charles started making the first SunRoof roofs. He asked me if I wanted to join him. I was fresh out of a deal with Delivery Hero, determined to keep going it was not the moment to invest. We talked later from time to time. After I left Delivery Hero, the topic returned Karol wanted me to join him and help him grow the company. However, I chose iTaxi. After two years, I began to mature to run my own company again, in which I would be the main shareholder and president. SunRoof was just at a point in time where it wouldn’t get off the ground without investment and dedicated attention. I decided that I would invest the money without getting involved. I even hired a person to manage this company, so as not to enter the situation of being my own brother’s boss. I invested, taking into account that if the project did not develop or my relationship with my brother began to deteriorate, I would withdraw and write off the money I had put in without much regret. I became more and more involved, however. I started to work more with my brother, and getting closer to him in this venture caused me to invest more money I entered the project wholeheartedly. This is the only exception when I put money into a family project, but I generally advise against doing something like this.

5. Crowdfunding

There are platforms such as Kickstarter, for example, which allow startups at various stages of development to raise funds in the form of social fundraising. This is particularly interesting for projects whose main goal is to help people in some aspect.

6. Grants

Not only in Poland, but also in Europe and the world, there are places that support entrepreneurship. It’s worth checking what we can get locally to help our business. Sometimes there is state or regional funding available for entrepreneurs, or it is possible to take advantage of infrastructure, such as a technology park. This can be a good start.

7. Loan

I won’t write extensively about this solution, as there is a lot of material on loans to companies. In the context of a startup, I would like to point out that an investor will always want shares in the company in exchange for his financial commitment. With a loan this is avoided, which is a big plus.

8. Business angel

They are not professional investors who do full time investing. They are people who enjoy entrepreneurship and have already made money on something. They have cash that they want to invest in new ideas. They are also the ones I refer to in this book when writing about investors.

9. Venture capital funds

They are the ones I will write about most here. In this book, along with business angels, they are referred to by me as investors.

Case

In the early days of OnlinePizza, when we wanted to develop our product, we couldn’t afford to do R&D research & ) with our own cash. So, we found a company that could do what we needed. We paid it with shares in our company. This situation is a bit like getting an investor, only instead of cash the investor puts in a service in barter, and we pay for it with shares. When we didn’t have money, it was a good way to pay the company without cash for the opportunity to take the next step.

Conclusions:

Examine your financial options using the points in the list above.

Think about what options you haven’t considered yet.

Look at the specifics of your project and, if you haven’t already done so, calculate the exact amount you need business development.

Do research on various sources of funding before you decide on any of them (especially if it is to be an external investor).