COMM 320 Lecture Notes - Lecture 10: Sweat Equity, Angel Investor, Elevator Pitch
7 Dec 2018
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Employees must be trained and paid: advertising must be paid. Burn rate rate at which firm is spending its capital until it reaches profitability. Some products are developed for years before being able to generate earnings. Sweat equity value of time and money put into venture. Bootstrapping minimize expenses by aggressively pursuing cost-cuttings techniques. Preparing to raise debt/equity financing steps: determine how much you need, determine most appropriate type of financing/funding, develop strategy for engaging potential investors/bankers. Elevator pitch: describe opportunity/problem that needs to be solved 20 seconds, describe how your product/service meets need 20 seconds, describe your qualifications 10 seconds, describe your market 10 seconds. Business angels: invest their personal capital in startups. Look for firms that have the potential to grow 30-40% per year. Invested in small firms and start-ups with exceptional growth potential: don"t usually invest early in the life of a start-up. Limited partners invest in venture capital funds: general partners manage the funds.
