FundingUniverse.com Funded!
What an interesting ride! Over the past couple months, we have been in the EXACT shoes of our customers: raising money from angel investors. We couldn’t be happier with our funding partners Grow Utah Ventures and Provo Labs. If you think about it, Grow Utah Ventures is very active in stimulating the angel investor space, and Provo Labs is doing the same for entrepreneurs — it’s a perfect match!
The experience has been a great learning opportunity for me and the entire FundingUniverse.com team. Here are a few of the things that I learned that aren’t the normal tips to raising money (in no particular order):
- Start the process early: You often hear the phrase, “it’s best to raise money when you don’t need it” — I completely agree. The amount of time that passes from the investor’s initial sign of interest ’til the money is wired into your bank account is probably TWICE as long as you expect. If you start the process early, you will not appear to be desperate and you can negotiate better terms.
- Learn about Term Sheets: There is one thing that you will definitely need to know when it comes to raising money: terms & term sheets. A sophisticated investor will add a lot of various terms to the term sheet that can make a huge impact on your funding. At the least, you should read the book Term Sheets & Valuations.
- Get a good lawyer: Again, with sophisticated investors, there will probably be alot of legal paperwork that will need to occur before the deal is closed. Usually there are important details that most entrepreneurs (including me) “don’t know that they don’t know.” In other words, lawyers will make sure that you are informed of everything that is happening (or not happening) in all of the documents.
- Make sure that your “ducks are aligned”: In other words, make sure that you are prepared for the due diligence that will invariably occur.
