How To Start-Up The Business?

2 million dollars for a 10 % stake. The deal is made. Overwhelmed with joy, the entrepreneurs leave the pitch-stage, having the deal pushed through. A hungry shark took the bait, from now on putting all hopes and believes as well as financial support into the revolutionary start-up.

Comfortably situated on the couch with a bag of crisps in the laps, we are quite entertained. Passively observing the happening, what we understand is: There’s a small company with a possibly great idea. For further business development, they need money. They present the idea to rich people, who are willing to spend their money. In exchange, a small part of the company then belongs to them.

The pre-seed stage is the very beginning of the game. There’s an approximate plan that could work. You got the name for your company and you might have a few ideas on technical engineer products or services that could make it. Though, what you’re holding in your hands is far away from anything concrete. For that reason, finding external investors isn’t likely to happen. It’s your own resources, friends and family, that finance market testing, the development of future sales plans and product launches.

Estimated value raised: Anything between $10k and $100k, depending on how long it takes you to figure out what works, how many step-backs you face, how much support you get from your surroundings.

When reaching the seed stage, you know with which product and where you want to position yourself on the market. Metaphorically spoken: You decided on what tree you wish to grow in the forest and where to plant the seed. Now it’s time to water it. People supporting companies at that stage can be called FFF’s: Fools, Friends and Family. Fools, since investing in a company, of which it’s still unsure if it will ever generate profit, can indeed be seen as a foolish take. Those fools can be Angel Investors, meaning, private people with over-average income, already matured start-ups or accelerators. All putting in their influence, financial support, mentorship and offered workspace. In some cases, in exchange with 5 – 10 % of the company’s capital. Crowdfunding should also be considered and with a bit of luck, already in this early stage Venture Capital firms specialized in early-stage-funds are giving in.