Sunday, February 20, 2011

Raising Seed Capital


"In the business world, the rearview mirror is always clearer than the windshield", said Warren Buffett, who  is widely regarded as one of the most successful investors in the world. Driving a "car" of my own business I would consider three $$ stops for the initial funding: 
1. Family and friends -  <= $ 5,000. 
       In my case it almost equals to self funding, because I have only immediate family in the USA, and just a few friends. Recommended amount is $50,000. How to get fixed this gap? One of the ways is to start working as a sole proprietor by providing consulting services to the customers without quitting the full time job and saving extra money for future business. It would take longer to start the business venture, but I might get a better picture about the market and build the customers base.
2. The Angel Investors - >= $350,000
     According to John Dimmer, I have some advantages over 97% of students because I am a woman. I follow his advice and will identify the regional women investors group "Seraph Capital Forum" http://www.seraphcapital.com as the audience for my business plan.   
3. Venture Capital - ???
    The VC would be the last source of raising seed capital only in the case when the amount of Angel's investment will be insufficient. The getting VC funding would be stressful and associated with risk of selling stoke too cheaply. 

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