Over the past 10 years, startups have been actively developing in the business market: companies with short story operating activities. Financing such projects is risky, but it can pay off on a scale that is several times greater than them: for this, all you need is to create a successful startup.
It is natural that not only the number of start-up entrepreneurs who want to implement their ideas and achieve success is growing rapidly, but also investors who want to make a profit and share in the "shot" projects.
Nothing personal? Investing in a startup "for your own"
At the initial stage of development, a startup often receives financial support from the so-called 3F group: family, friends and fools (“family, friends and fools”). It can help a novice businessman to have good connections with influential and successful people, but not everyone has such connections (and the amount of money received from investors, most often, is not commensurate with the budget necessary for business development). In such a situation, almost all budding startups - mostly young people aged 25 to 30 - face the same dilemma: the ideas are not bad, and the team is decent, but where can one find funding sources that can take the project to a new level?
Startup without a budget: not a problem, but a dilemma
In the context of the still relatively young and undeveloped venture market in Russia, this dilemma looks like a problem. In order to attract investors, you need an innovative idea that will be profitable to allocate this project in their eyes among a large number of other similar ones. However, one idea is not enough: it is also necessary to correctly formulate it, identify target groups consumers, explain why the product will be in demand, write a scalable business plan, and present it all to a potential investor. A clearly structured startup business plan will create its “tangibility”, and a potential investor will understand that it is financing a particular business.
There are quite a lot of potential sources of financing for startups in Russia. You can apply for subsidies to the institutions created by the Government to support start-up businesses (Russian Venture Company, Agency for Strategic Initiatives), which will provide the project with a budget free of charge. Alternatively, contact a venture capital fund. There are not so many of the latter in Russia yet, and a number of inconveniences are associated with them: for financial investments in such a business, venture funds require fairly large shares of the company, and they do not always adequately respond to the fact that the project does not immediately bring profit.
From project idea to IPO - through an incubator?
At the stage of raising funding, the communication skills of its founders are extremely important for a startup: their ability to intelligibly explain why a project is worth investing in. But not all ideologists have such qualities, some simply do not have enough experience for this. In such a situation, it is possible to attract investment brokers who have the necessary knowledge in this aspect and will be able to attract investors for a fee of up to 5% of the attracted amount.
Also a good platform for the primary development of startups are business incubators, which can sometimes be provided by companies and venture capital funds. However, this measure can only be considered as a temporary measure, and only provides a foundation for the further growth of the project.
In general, there are enough ways to find money to "start". However, it must be remembered that not all financial investments in such a business pay off immediately, and it can take quite a long time before the coveted point of success - an IPO. a large number of time.
is not only a new convenient technology invented by advanced and progressive young people, but also a good way to earn money. Success stories attracting investments can bring hundreds and even thousands. But the most important thing is that the investor who invests, in case of success, pays off his investments tens or thousands of times!
How to invest in a startup through the stock exchange
For those who are not business gurus information technologies or does not rotate in the appropriate circles, but is eager to try himself in the role of a person who has seen successful project at an early stage, there are startup exchanges.
Napartner
One of the most famous startup exchanges in the Russian segment of the Internet. It is a full-fledged platform with the possibility of making profitable investment in many projects, unlike crowdfunding platforms such as kickstarter.com and planeta.ru, which are often put on a par with classic startup exchanges, despite the fact that voluntary investments there cannot be called full-fledged investments.
The official website napartner.ru presents many projects suitable for both budget and very wealthy investors - the total needs of various startups vary from several tens of thousands to several tens of millions of rubles. In addition, the authors of the projects indicate in the description the amount of profit that will be paid to investors. It can also vary greatly depending on the chosen startup and can be less than 10% or more than 50%.
One of the downsides noted by napartner investors is the occasional overcharging of projects, even when similar businesses are already operating and the cost of launching them is obvious. For this reason, it is necessary to carefully read the description of startups and choose directions that the investor has an idea about in order not to be deceived. However, it should be noted that such cases are typical for most sites operating on the principle of free market, and frankly fraudulent projects on the napartner exchange are subject to manual moderation.
startup network
Another classic startup exchange. An interesting feature resource is the presence of projects on it both in Russian and in English language. All payments are made in US dollars. The amounts required for the implementation of startups range from several thousand to several million dollars.
At the same time, the minimum amount that an investor can invest is not fixed and depends on the conditions of a particular project. The founders of some of them are satisfied with a lot of investments of $ 1, thanks to which even an investor with a minimum capital can try his hand at investing in startups here. At the same time, there are also projects that allow you to invest at least 10% -30% or even just the entire amount at once, which is why the minimum investment for them can often be over 100 thousand dollars.
As a reward, the investor can be offered both shares or shares of the company, as well as other financing conditions - this issue is decided by the startup itself. As on other sites, on the official website startupnetwork.ru there are projects with clearly inflated fees.
Crowdfunder
Another one foreign site with settlements in dollars, offering investors investments in startups, for which they will receive not a product sample or other bonuses, as on many other sites, but a full-fledged profit. The investor's income here is most often determined by the interest rate, but there are other options, for example, a share in capital or in revenue.
Since the calculations are made in dollars, one cannot expect sky-high profitability from startups with a fixed rate, but it is quite possible to find offers at 10 percent or more, which is not bad even for rubles, but for dollar investments it is completely excellent.
The minimum investment amount is not fixed, and each startup has the right to choose it, however, croudfunder.com is hardly a place for investors with small capital. Usually, minimum investment on it is from 5 to 20 thousand dollars, less often there are projects where you can invest one thousand. At the same time, the maximum amounts are often not limited at all - you can completely close the financing of a startup yourself, even if its size exceeds a million dollars.
business platform
A Russian resource that helps startups find funding from investors. Unlike the exchanges listed above, the business-platform.ru website does not provide for the possibility of indirect equity financing using the platform as an intermediary - all projects involve finding a partner to start a business, that is, for personal negotiations with the project founders and their full financing.
For this reason, the amount of investment there starts from 100 thousand rubles, and the average amount is more than 1 million.
A large number of sites operate according to similar schemes, such as
- rusinvestproject.ru
- towave.ru
- start2up.ru and many others.
However, due to their low appeal to small investors interested in equity rather than full partnerships, they are less interesting than classic startup exchanges.
Kickstarter
A unique community of creative individuals who alone and jointly create various projects, bring something new, useful and interesting to our lives. On this moment about 7.5 million people have already added their projects to the pages of a modern and convenient site. Approximately 2.2 million people have added more than one project, and 264 thousand talents have uploaded 10 or more recent ideas.
The resource presents not only modern technologies. There are categories for music, videos, photos, games, design, fashion, theater, food, and many other popular destinations. Friends, fans and unknowns have already invested about 1 billion dollars in Kickstarter projects. Money is invested in everything from cute handmade homemade cards to Oscar-winning documentaries.
Smipon
A platform for the presentation and organization of co-financing of the most creative and striking projects of the Runet. In addition to the business sector, ecology, education and creativity are in demand.
Thanks to (the English analogue of the phrases crowd funding, crowd funding) it is possible to raise funds in order to implement the most interesting ideas and ideas, for the implementation of which everything has already been invented, except for the source of financing. In addition to raising funds, startups also get to know their potential supporters and partners and, in principle, declare the existence of their project.
Boomstarter
This resource lives up to its name. It is worth coming here at least to admire the magnificent site, excellent advertising strategy and make sure that any project can become a creative, popular and successful undertaking.
There are too creative ideas on the site, like soap that saves from zombies, but even they collect some money. At the same time, a lot of projects were born on Boommaster, which have already collected several million rubles in their investment fund. The total number of registered users of the resource is 65,280 people. In total, 492 projects were financed for an amount that almost reached 97,000,000 rubles!!! Even the famous comedian Mikhail Zadornov raised funds here for his documentary.
planeta.ru
Do you fundamentally want to invest only in the best, new and progressive? Then go straight to planeta.ru! During the existence of the project, more than 152 million rubles were collected as investments. You can invest in already successful, well-established projects or donate a certain amount of money in the form of a charitable contribution.
The resource is regularly updated with new fresh ideas, and pleases its visitors with relevant news from the world of startups in all possible directions. Planeta.ru also stands out for its unique store, which sometimes offers amazing and exclusive items at more than affordable prices.
indiegogo
Another interesting English-language project that invites everyone to try themselves as a project creator or investor. The resource positions itself as a bank of ideas that are very easy to implement. To start the path to your dream, it is enough to create a campaign, start a community and start raising funds.
A user-friendly interface allows you to quickly find an attractive project that will probably become very profitable investment already in the near future.
Rockethub
Do you want to invest in art, science, technical creativity or business? RockHub is guaranteed to help you quickly find the shortest path to success. It has everything you need for an advanced investor. Thousands of users with the best ideas and huge potential. Millions of dollars of investments pointing to the most promising directions.
There are a lot of social projects on this resource. If you want to help children or families from poor countries, as well as financially participate in the process of their education, feel free to launch a crowdfunding machine.
Crowdcube
A highly specialized resource aimed at raising funds for the development of innovative technologies of British origin. The project figures are impressive.
Despite the name, on this English-language exchange, investors can find many start-ups in the field of innovative technologies and Internet services in which they can profitably invest money. All calculations are made in pounds sterling, due to the British origin of the project.
Remuneration for investors is determined by the creator of the project and, as a rule, their amount is indicated as a percentage of the future capital of the company.
Unlike Russian startup exchanges, crowdcube offers sponsors an average share of 3% to 20%. However, there are also offers that indicate a fixed percentage that the investor will receive after the return of his investments - most often they come from already existing companies, raising funds for business development and already quite aware of how and with what they will pay.
At the service there are very major projects, for example, a full-fledged bank B-North is raising funds for opening there - over 1.5 million pounds. However, there are also much more modest start-ups, such as the Wingman app, which required £50,000.
- At the time of writing, the project has collected more than one and a half times the amount needed. Thus, the amount of investment on crowdcube.com is not limited to the amount required by the startup founder - you can always invest more if the project needs it.
It has everything you need to quickly launch profitable projects - a bunch of fresh ideas, a lot of creativity and the absolute absence of any paperwork.
At an early stage of the project, not so little. It is important to understand which ones are right for you, what are their pros and cons.
1. Classic FFF (friends, family and fools)
Speaking in Russian, they are familiar with money, family and people who do not have venture capital experience, but who want to invest in a startup.
Where to look for the first and second - it is clear without much explanation. The latter are rather friends of friends, and it is difficult to recommend them. In addition to their lack of experience, there is a risk of getting people who are far from your values or understanding of the riskiness of venture investments as co-owners of the company.
We ourselves started the NappyClub project with nine million rubles provided by friends. This, of course, is a serious amount, and it allowed us to test more strategies at the initial stage. In most cases, friends and acquaintances are ready to borrow up to a million rubles. But often this is enough to form the minimum product (MVP) and test the business model.
The undoubted advantage is that this type of investor is initially more loyal and does not require complex procedures for processing transactions, prescribing KPIs, detailed reports and presentations. The main risks are to ruin relationships with loved ones if the startup does not take off. And it can be very painful for both you and them. To insure, it is important at the very start to clearly outline what you plan to do with the money received and what scenarios for the development of events are possible up to a complete loss of money.
2. Business angels
Professional or aspiring private investors. They invest personal money - as a rule, in the early stages of project development. You can find the largest of them by googling the rating of Russian business angels. As a rule, they themselves write in their social networks how best to contact them. The rest live at startup exhibitions, hackathons and other thematic events. And here it is important to be able to quickly and efficiently tell about the project.
Be polite, concise, and don't argue. These people have at least already earned enough money to invest. And as a maximum, they have seen and participated in hundreds of projects and can quickly assess which of them will take off and which will not.
And finally, if you can’t see angels in the flesh nearby, you can try to look for them on specialized world sites, like Angel List, Startup Point or Pitch Book. This is how Ticketforevent.com, a ticketing service I know, did in its time, having received funding to enter a new market.
3. Classic
This is a fundraiser for the implementation of the project from a large number small investors interested in your product. In other words - with the world on a string. There are professional platforms where you can post a project description and where there is already an audience of people who want to finance a startup: Russian BoomStarter and international Kickstarter, Indiegogo, Fig.
So far, crowdfunding is not very popular in Russia as a method of financing business projects. Basically, good collections show social and charitable initiatives. On global platforms, the audience is larger, and startups are more serious. There are projects that have raised tens of millions of dollars, such as the game Kingdom Death: Monster or the Coolest Cooler.
And it is important to understand that without a large community, a well-known name of a founder or a marketing guru in the team, the chances of raising serious funding on such sites tend to zero.
An alternative option is to throw a cry to the whole world through social media and blogs. If you have a lot of loyal followers, then this can work. So, for example, did Fedor Ovchinnikov, attracting primary investment in Dodo Pizza.
4. Crowdfunding through loans
For example, through the Alfa Potok and StartTrack services. A suitable option if the project already has sales. Such platforms collect a pool of small investors who are ready to give syndicated loans to startups. Interest rates are higher than bank rates, terms are shorter, but collateral is not required and registration is relatively fast.
Suitable for projects with high turnover and corresponding profitability, but without fixed assets.
5. Ordinary loan with a pledge of own property
This, of course, is hardcore and the risk of losing everything if the startup doesn't take off. But if you have confidence in your abilities, this option is, in my opinion, the most correct one and will seriously raise your credibility in the eyes of investors at further stages of financing.
I myself, as the managing partner of a small investment fund, ceteris paribus, will choose the guys who put their money and assets on the map of the success of the project.
In this case, they will, firstly, be much more responsible for the costs, and secondly, they will fight for the project to the end.
If the amounts are large, and the project involves the acquisition of fixed assets that can be used as collateral, it is advisable to consider project financing programs from banks. To do this, you will need to defend a detailed financial and business plan with the bank.
6. Subscribing customers to a product before the appearance of a B2C product
In this case, production or purchase is carried out when there is enough money to start. Similar to crowdfunding, but does not require special platforms or great popularity in social networks. In fact, we are talking about pre-sales.
Developers like to use this method very much when selling future apartments at the stage project documentation. Unlike some bad developers, always keep promises or return money.
For product startups, you can make a landing page and collect a subscription for orders with deferred delivery or use the mechanism joint purchases(collection of an amount sufficient for the wholesale lot to receive a volume discount). Large funds cannot be collected in this way, but it may be enough to order a test batch. At the same time, you will test the demand, up to real costs.
7. Obtaining project financing from potential clients
If you have a B2B startup (the main clients are companies, not individuals), try to get funding from large companies that may be interested in your product.
Nobody promises that it will be easy. And for everything to work out, the product must be unique or increase the margins of the business of potential customers.
It is important to have test samples available and a well-calculated financial and feasibility presentation.
In the States, such stories are very common. So, Bill Gates started the multibillion-dollar and beloved Microsoft, having received financing for MS-DOS from IBM even before the product was available.
Our companies are more careful. But if you have experience, a name in the industry, and the company needs the product and it’s easier to make it with your own hands, there are chances.
8. Obtaining funding from production
It can work if you have a startup about selling products, and manufacturers are interested in entering new markets or reaching new audiences.
At first glance, this method may seem practically unrealizable. But it's not. We have used it successfully ourselves. Our diapers are manufactured in several Asian factories that work with premium European and Japanese brands such as BASF and Sumitomo.
In 2017, we expanded the range, introduced new panties, and the production was so interested in entering Russian market that we managed to achieve a delay in payment, allowing us to pay off the proceeds from the sale of goods.
9. Exchange of startup shares through options for necessary services
Startup funding is needed to receive certain services that allow it to develop. Why not exclude money from this chain? If you have a strong enough reputation and a promising project, you can always pay with shares in the company. Most importantly, do not forget about the cliff and vesting formula for employees (Google will help).
The method is suitable only for those whom potential contractors or employees can trust one hundred percent. And this is one of the reasons to always work for an honest name - it will feed even without money.
Once Facebook paid off with its shares for the design of a new office. Mark Zuckerberg got graffiti by a fashion artist. And artist David Zhou - a share that, when Facebook went public with an IPO, became worth $200 million.
10. Accelerators
This is our everything, because, unlike angels, startup accelerators can not only finance the creation of an MVP, but also teach business processes, deliver sales, and then present them to late-stage investors.
In Russia, the most famous accelerator is IIDF, in the West - Y-combinator, 500 startups and TechStars, in Asia - SOSV and Chinaccelerator. The purpose of the accelerator is to speed up the test period of a startup by teaching the founders to test business hypotheses, sell, and ultimately understand whether the idea will take off. And it takes only 3-6 months. Plus, accelerators always have a large circle of partner investors who are ready to take on projects at more “adult” stages of financing.
IIDF, for example, for an investment of 2.5 million rubles takes a share of 7% of the project. Whether it's a good deal or a bad deal is up to you, but accelerators can certainly teach you a lot.
11. Grants and competitions
Another tool that allows the best of the projects to receive funding. Grants, as a rule, are aimed at accelerating the development of certain industries or technological areas. They do not require payment, but they require winning the competition and strictly following the program of use after receiving funding. In terms of flexibility, this is a minus, since you will not be able to drastically change the direction of a startup. But from the point of view of the cost of money, this is the undisputed leader, because you do not need to give away any shares, or the grants themselves, or interest for their use.
Be careful with government competitions and grants, as everything is very bureaucratic. But there are also commercial ones: from large companies, universities (Innopolis) or venture giants. There are also aggregator sites where it is easier to search for information, like rsci.ru.
We did not use grants. But one of our portfolio projects Avatrip.com received a grant under the StartFellows program from the head of the DST fund, Yuri Milner, and the creator of VK, Pavel Durov. I recommend choosing those grants that your project is most suitable for, and strictly adhere to all the conditions for participation in the competitive application, since it is for them that candidates are selected.
12. Venture capital and private equity funds
What many people start with, although, in my opinion, it is more correct to end with this when all other methods of obtaining money have already been used. For the investment of the fund, you will give away a significant share in the business and part of the control over it. The later you do this, the better the valuation of the business will be and the greater part of it will remain with you.
Therefore, it makes sense to go to venture funds only after finding a working business model, with an understanding of your economy and convincing historical business development metrics.
The funds are interested in a strong team that has proven its competence, a large market and the potential for rapid growth in project capitalization. Accordingly, such money is appropriate for obtaining financial leverage for accelerated scaling.
The list of Russian venture funds is easy to find by googling the ratings compiled by many business publications. I recommend looking into their portfolio to see if they are investing in businesses like yours. It is useful to read interviews with fund managers, to find out how they select projects that they consider important. It is better if, at the first contact, your project will be presented by someone with whom they have already worked. But if there are no direct contacts, you can write or leave applications through the channels indicated on the site.
An alternative option is to participate in targeted events: venture conferences, exhibitions, hackathons. Often, funds hold pitch sessions for startups there or study exhibitors. So, at one of the venture conferences, our portfolio project Expopromoter got acquainted with a large Russian fund and received an investment offer.
13. or Tokensale
What a year ago was a new and breakthrough way to get investments, has now turned into a dubious story, which is avoided by most classic funds. Initially, ICO was carried out only by projects related to the blockchain. But at the peak of popularity and easy fees, many startups have learned to attach the blockchain label to anything and raise money for dating, cats, sand pits and other exciting goals.
In the case of ICOs, it is important to understand a number of things. First, in order to raise a lot of money for something unnecessary, you must first spend a lot of money. If at the beginning of 2017 the cost of conducting an ICO campaign was $20-50 thousand, now the amount starts from $500 thousand. And listing on large exchanges, without which there will be no liquidity of the project tokens, costs millions of dollars.
Secondly, there are huge legal risks. In most countries, there is still no clear legislation governing ICOs.
There is always a chance, even acting as trustworthy as possible, as a result of the ICO to face the law. As, for example, happened in China, where in September 2017 central bank wrote a directive according to which he canceled all earlier ICOs and demanded the return of the collected money. It is rather difficult to imagine how local entrepreneurs returned them, given that up to 20% of the funds raised can be spent on ICOs in the form of various commissions.
Thirdly, ICO is a public event. Having successfully spent it, you tell the whole world who has got money that the state does not consider money and does not protect. You can not talk about the costs of a personal meeting with a thousand upset investors in the event of a project failure.
In general, if you are from a real blockchain, then you yourself know everything, and if not, then it’s better not to.
Personal experience
The choice of a specific development option depends on the characteristics of the startup. Based on my ten years of experience in investments, I can say that it is possible to effectively combine various methods of obtaining financing.
This is exactly what we did with NappyClub. We started with investments from friends and angel investments, thus testing the business model. Further, they received financial leverage from the production, where orders were placed, which made it possible to expand the product line. When tangible sales appeared, they increased working capital already borrowed.
It is not necessary to try to close everything at once with one source, it is better to move forward, in accordance with the stages of startup development. First - to get funds, which will be enough to create a minimal product and test the idea. When the first results appear, it will be easier to attract funding. This is the most logical and cheapest option.
It is not worth rushing for direct investments from funds right away, since when shifted to the cost of capital, they are the most expensive. It is better to first grow a business and only then go to the funds with a normal assessment and an understandable model.
A startup can be called any company that is at the stage of its inception or has just begun its activities. Such an organization often brings an innovative idea in the Internet technology environment, in medicine or in the scientific field. All start-up businessmen need funding for start-ups.
As a rule, the face of a startup is a young person aged 25-30 who has his own view on the implementation of certain business processes. He has original idea which will certainly be profitable in the future. And for the implementation of such a scheme, funds are needed. Therefore, it is advisable to attract investors who will contribute to the development of the business. And their search is a whole science, and we'll talk about it today.
Innovative technologies and startup
During the rapid development of the Internet and science in general, many business processes are taking on their modernized look. A startup can include not only the development of a fundamentally new type of service or product, but also the refinement of existing ones. Certain models that would be useful in the field of sales of goods or in management activities.
On this moment The following areas in Russia are most subject to innovation:
Management.Science.Education.Services.Information technology.
The development of new models in any case often implies not only the profit that companies can make, but also the progress that they can make and take a leading position in a certain area.
Startup development
Every startup has its own life cycle and goes through several stages.
First stage is the very idea. It needs to be carefully worked out. Decide on the target audience, develop a business plan, study competitors, make forecasts.
Second phase- the creation of an initial product or service that would be a test.
Third stage- development of a minimum product that would become an indicator for understanding whether the idea will be successful or not.
Fourth stage- Creation of the main product and its implementation. Capturing the market and increasing influence on adjacent market segments.
In order to carry out this whole process, it is necessary to clearly divide the responsibilities. Only the business where the whole team works will be successful. Therefore, it is important not only to find investors, but also to have partners in various fields of activity - from marketing to the sale of goods or services.
Startup investment
Each stage may require a certain amount of investment. If at first this amount can be equal to a couple of thousand dollars, then it increases hundreds of times. First you need to find an investor who is characterized as a business angel. Usually, this is an investment of up to $1 million. Banks, such as Sberbank, also offer small investments, we will talk about them below.
Further, at the stages of implementation of initial and test products, venture and seed funds are required, their investments do not exceed $500,000 million. And then strategic investors are attracted, who invest more than $0.5 billion.
Financing schemes
Often an infusion Money in a startup implies the purchase of part of the rights by investors. Such a deal is very profitable in the long run, if the business is successful. In Russia, there are the following financing schemes:
Deferred funding. This is a scheme for when an agreement is concluded: for how long and up to what stage the money will be injected. Further, the investor, without additional additions, receives his profit from the company's share. Fan. This scheme is suitable for beginner startups. The idea is that funding occurs for good idea for those who have not set up a business process yet. The investor is ready to pay only if the investment amount is at least 10 times less than the potential profit.
Many criteria can affect whether you can find your own investor. This is the uniqueness of the idea, the presence of competitors, money-back guarantees, the value of the company in the event of a sale.
Where to look for investors?
The main investors for startups are venture capital funds. But they work only with those companies that have already established themselves in the market. With those who are already making a profit. Attracting such companies is not easy. The main criterion for them will be a risk-free investment. Sources of financing for venture funds - insurance companies, pension funds. These are organizations that are not ready to invest in dubious and risky projects.
There is also a type of investor known as business angels. These are individuals who are interested in getting the maximum return on investment. Therefore, they invest in aspiring startups a small amount of money, not exceeding $ 1 million. Most of these individuals invest not in one project, but in several, as this is a very risky undertaking. The advantage of working with individuals is that they do not expect momentary profits and do not interfere in the business process.
For most start-up businessmen, relatives are the most common investors. In Russia, start-ups, initially implemented with the money of relatives, take the second place in terms of number. Also, bank loans are often used as investments in the project, the most popular in this direction is Sberbank.
Startup exchanges and the Internet
There are special events and forums that are held in different cities. At such forums, novice startups present their project, and investors evaluate it and give recommendations for development. Such events often bring together investors, programmers, scientists, and politicians. There you can also attract investors and conclude deals for the investment of your project.
In addition, a potential investor can be found on the Internet. There are a lot of sites, exchanges, forums on this topic. One of the most popular in Russia https://startupnetwork.ru/. On such resources, you can post information about your own project, which makes it possible to find an investor.
Grants
One of the most attractive ways to get money for business development is through grants. Many large companies and investors are ready to provide money on a free basis only in order to have a part of the profit from the implementation of your idea. Grants are mainly issued in the field of IT technologies, medicine, science, and the space industry.
In Russia, the most popular grant is the Small Business Development Fund. Here you can get about 1 million rubles to start your project. And also about 200 thousand rubles on an annual basis up to two years.
There are regional grants and subsidies from the government. Depending on which direction is developing in a given region of Russia, you can apply for funds for development own business. Often, various agricultural and farming enterprises are sponsored, which are able to attract the state to organize subsidies.
Credit in Sberbank
For many entrepreneurs, the only option for obtaining investments is obtaining special loans from banks. The main bank in this direction is Sberbank. This company offers a product for startups called "Business Start". Sberbank is a fairly reliable partner for the implementation of projects for start-up entrepreneurs.
The loan is provided by Sberbank for a period of 6 months to 3.5 years at an interest rate of 17.5-18.5%. You can get a loan up to 3 million rubles. The advantages of this Sberbank program, unlike many other programs in other banks, is that an entrepreneur who has no experience in this area can receive money.
Sberbank itself will prepare a business plan and will advise you in the course of doing business. You only need to fulfill a number of conditions, which include studying the business course posted on the bank's website. In addition, the borrower must:
Be between the ages of 20 and 60. Have no business experience or have not been in business for 3 months before applying. Have a share own funds not less than 20%.
Also, according to the terms of the Sberbank program, the borrower is granted a deferred payment of up to 6 months. This is one of the few programs that supports a start-up, but you can also open a franchise firm.
Sberbank is ready to provide a standard business plan for a number of areas, which include: hairdressing, transport, cleaning services, organization of beauty salons and a number of other projects that can be found on the Sberbank website.
Forms of attracting investments
There are several forms of startup funding. Investors are interested in the most profitable investment own funds, so many of them provide support to promising start-ups not only at the initial stage, but also in the development process. The purpose of financing start-ups in some cases is socially significant activities and the improvement of general well-being. Socially oriented projects benefit from government cash subsidies. Charity is another incentive to support entrepreneurship, which is associated with gratuitous provision of funds in the form of grants and subsidies.
In practice, two basic approaches to investing in entrepreneurial business projects are implemented. The first is to pay grants for the implementation of startup ideas. The investor's interest in this case is concentrated on non-material gain.
Startup financing investment funds and individual investors are focused on obtaining future profits from their start-up investments in a business project. This is the essence of the second approach to financing startups in Russia. Investors agree on the terms of transferring their own funds to entrepreneurs in order to implement a startup idea. As a reward for the amount provided, the businessman usually offers a share in the future profits of the project or the right to partially manage the project. The condition can also be arranged in the form of a standard loan model: the borrower undertakes to repay the debt with interest accruing for the period of using the lender's money.
Variety of funding sources for startups
The forms of fundraising listed above assume the existence of various sources of financing at each stage of the project implementation. The main investment agents are divided into two groups:
Private investment funds Business angels
Investment funds
Private investment funds are organizations that specialize in investing assets attracted from investors in promising projects that generate income in the medium and long term. Venture funds focus on supporting developing innovative start-ups. Such investments are characterized by a high degree of risk. However, before making a decision on investing, the investor evaluates the project presented by the entrepreneur in terms of the likelihood of successful implementation. In order to hedge risks, funds are allocated immediately for a number of projects from different areas. One of the tasks of venture investment funds is to acquire control over the activities of innovative start-ups. The largest organizations financing startups both in Russia and around the world are IMI.VC, Runa Capital, Kite Ventures, ru-Net Ventures, ABRT Venture Fund, etc.
On the subject: Investing in startups: attraction, rules, important points.
Who are business angels
Business angels are private investors. Financing startups for them is the same as for investment funds - an opportunity to profitably place their own assets for profit in the future. But the probability of receiving funds from such a source is much higher. Often business angels are not competent enough to objectively assess the risk of investments. An entrepreneur's idea can make the right emotional impression, and funding for a startup is guaranteed.
Business angels are less demanding on a quick return on their investments compared to formal investment funds and commercial banks. The first are aimed at long-term investments Therefore, they are sympathetic to temporary difficulties in the initial stages. Business angels are interested in a gradual return on their investments and manage only their own funds.
Startup funding stages
Internet as a platform for presentation
The volume of transactions made via the Internet is growing every year. This information is also relevant for entrepreneurs seeking funds for the implementation of large-scale projects.
What is crowdfunding
The World Wide Web allows you to find investors to finance a startup among ordinary people who are interested in the entrepreneur's business idea. Crowdfunding sites offer the purchase of "shares" of a future project, behind which there is a right to a subsequent reward for an investor from a start-up company (see Advantages and disadvantages of investing in stocks and bonds). If the project plans to establish the production of unique products, the "shareholder" has the opportunity to receive a copy of it as a gift. Money is transferred stakeholders including free of charge. Crowdfunding is also an opportunity to attract the attention of the future target audience to the ongoing project.
Presentation is an effective way to attract an audience
In order for people to believe in your success and realize the value of their own investments in your startup, it is important to clearly demonstrate the prospects of your idea and its relevance. To raise the necessary funds to launch the project allows its external attractiveness for the investor. When placing a fundraising announcement on a crowdfunding platform, it is important to highlight all the positive features of a business idea. The main rule: any statement about the goals, methods of implementation and criteria for future success must be specific. Numbers and graphs clearly demonstrate your own confidence in success - remember this rule.
Raising funds through the stock market
To attract tangible cash injections from the outside, you can seek help from the stock market.
A bit about financial instruments
The stock market presupposes the presence of agents interested in acquiring financial assets that bring the highest return with the least risk. There are many different instruments of varying degrees of liquidity to choose from: stocks, bonds, derivatives, etc. Investors acquire proposed assets for one of two purposes:
resale of assets at a higher price in the future long-term investment in order to obtain a permanent income
IPO as a way to attract investment
A common recruiting method external funding startup is to conduct an IPO (Initial Public Offering) - the initial public offering of the company's shares on the stock market. By purchasing them, the investor makes a contribution to the capital of a start-up company. IPOs are carried out by both relatively “young” business projects and already developed firms. Placing shares in the public domain is associated with the risk of losing control over the management of the project, when a large share of the capital is concentrated in one shareholder. New entrepreneurs should avoid this.
IPO (Initial Public Offering) - the first public sale of shares allows you to raise the money necessary for the development of the project
Bank loan and government subsidies
An alternative to private and professional investors are:
loans from commercial banks state subsidies intended for certain areas of business
Startup lending
It should be borne in mind that this method of obtaining funding is associated with a formal procedure for “protecting” a business project. Banks are the least risk-averse sources of investment, therefore, as a guarantee of solvency, the borrower is obliged to provide information about the state of assets (real estate and other property), as well as the presence of a steady income. Depending on the conditions, a loan from a commercial bank implies full or partial exemption from payments during the initial stage of the project. This allows the entrepreneur to reduce costs in the process of project formation.
The interest rate on a loan depends on the amount borrowed money and goals for obtaining funding. Startups at the initial stage of implementation are provided with amounts on average not exceeding 2 million rubles. In the future, the bank reviews the degree of risk of the project based on the success of its start.
Government funding for startups
At the country level, several large programs of subsidizing and providing grants to entrepreneurial projects are currently being implemented. Public policy in the field of entrepreneurship support, it is connected with the activities of JSC Rusnano and State Corporation Rostekhnologiya. Through these organizations, startups are subsidized. Priority areas at the moment are innovation projects and agriculture.
The state ensures the activities of its own investment funds (Investment Fund of the Russian Federation, Skolkovo Fund, etc.). Funds are redistributed on a competitive basis both between the subjects of the federation and between individual social projects. Innovative startups are most likely to receive state grants in the Russian Federation, since the priority goal of budget policy now is the development knowledge-intensive industries associated with high technology.
To raise funds at the initial stage of implementing a business idea, it is necessary to convince the investor of the future success of the project. Depending on its scale, an entrepreneur chooses a source of funding for a startup. It is important to take into account the peculiarities of individual forms and sources of financing so that investments at the lowest cost bring income in the short and medium term. An entrepreneur always relies on his own strength, so he must correctly calculate the risks at each stage of the implementation of a startup idea. This will allow you to achieve success in any endeavor!
Startup funding
IN currently the content of the concept of "startup" is reduced to a company that has a relatively short history of operations. This refers to a newly established company that is in the stage of active development or exploration of potential and promising markets. Most often, start-up companies are based on innovative technologies: Internet resources, all kinds of nanotechnologies, medicine and much more.
Startup funding
To date, the main niche of startup creators is represented by young people in the age group from 25 to 30 years old, who have an original look at the organization of the enterprise and the ability to implement creative ideas aimed at making a profit. The main and first task of the project developers is to attract promising investors who are ready to provide a financial foundation for the development of a startup.
Startup funding
Between the words "startup" and "idea" you can actually put an equal sign, since in the age of information technology dominance and intense competition in all areas of activity, the original idea is measured in monetary terms. The criteria for the value of an idea are usefulness and innovativeness.
Innovation and startup
Innovation and startup
Innovation is the final result of the implementation of a fundamentally new intellectual development aimed at updating various areas people activities:
technologies; education; control; service; the science; informatization and much more.
Innovation also involves the implementation of a creative project and obtaining visible results. In this context, results are not only material values, that is, monetary profit, but also leadership, significant modernization, priority, progress, and so on.
Startup development
Startup development
Creating a full-fledged startup company involves overcoming several key stages.
First of all, you need to develop an idea. This applies not only to its formulation and voicing, but also to more formal things: drawing up a business plan, analyzing a potential target audience, studying competitors, and financial forecasting. At the next stage, a model and prototype of the final product is developed. After that, the so-called Minimum Viable Product is created, that is, the minimum viable product. It can also be called trial products. Once launched on the market, it will become an indicator consumer demand. With positive indicators, the final, full-fledged product is created and attempts are made to extend influence to the entire relevant market segment.
Startup development
Successful teamwork is very important in the development of a startup. Project development implies responsibility for many areas that require concentrated attention. It is impossible to improve the product and establish markets at the same time. It will be much more effective if they do it 2 different person. According to international experts, each startup goes through 5 key stages in its development:
sowing stage - seed stage - forecasts; startup stage - a waste of resources; growth stage - growth stage - making a profit; expansion stage - expansion stage; exit stage - exit stage - entering the global market.
Startup and investments
Stages of development of an innovative company
A specific feature of a start-up company lies in the chronic lack of finances, the lack of a reliable material base and the precarious position of the company on big market. Contrary to popular belief, a startup is not a small copy of large enterprise, since the classical understanding of business does not imply the presence of innovative technologies.
For the active development of any startup project, financial investments are necessary. Size material needs increases in direct proportion to the growth of the company. At the first stage of the implementation of the idea, several thousand dollars may be needed, and in the process of development the amount will increase to millions.
Startup funding
Startup funding
In most cases, startup companies are financed by sponsors who receive certain rights to some part of the future company. If the startup is successful, then the deal will be beneficial for both parties.
Financing of such projects can be divided into two basic categories:
Postponed to stability. This type of investment is a classic investment of money with the need for a future return. An agreement is concluded between investors and developers, including the following information: Determine the stage of the project up to which funding will be available. In return, the investor receives a certain share of the profits from further development project. You can draw an analogy with buying shares in a promising company that already has a specific product and convincing forecasts. Rolling funding. The peculiarity of this type of investment is that developers have the opportunity to receive money in the early stages of project development. In some cases, a clear startup idea is enough to fund. Investors cooperate only with those start-up companies that have the potential to recoup investments not by 2 or even 3 times, but dozens of times.
Investor logic
Sources of financing
The main potential investors of startups are venture funds, which are created specifically to finance startups. However, some difficulties arise here, since in order to receive a loan from a venture fund, the company must already be at a certain stage of development, have a reliable reputation and have the final version of the product. Its place in the market plays an important role.
Investment sources
The source of funds for venture funds is the money of their investors, that is, insurance companies, individuals, as well as pension funds. They do not associate with unreliable companies and prefer startups with an average degree of risk. It is important that the company has good prospects and high potential profitability.
Risk assessment scale
Another source of funding for a startup company is business angels. This concept refers to individuals who invest in growing business at an early stage. Their goal is to make a large profit in the future, and therefore business or investment angels do not insist on an urgent return of capital. In addition, they do not interfere in the process of doing business.
In some cases, the main source of funding may be family: relatives or friends. At first glance, this seems like a rather risky undertaking, but today it is this category that ranks second in Russia in terms of the amount of invested funds in start-up companies. If we talk about the international level, then the family will be in third place.
Search for investors
Search for investors
Finding a source of funding is a paramount task when creating a startup, since the further development of the project depends on the availability of material support. Currently, young startups are turning to “Networking” to find potential investors. This concept refers to profiling conferences and events aimed at studying promising projects. Any company that senses potential in its startup project can take part.
In addition to startups, investors also participate in such industry conferences and forums. They carefully watch the presentations offered by the participants, express their opinion about the advantages and disadvantages of the project, and also make deals with future partners.
Some startups found their investors by publishing the project on various sites. In addition, there are exchanges of start-up companies on the network, as well as a number of organizations that finance such projects. You can contact them directly.
Startup Tips
Creating a successful project depends on many factors, many of which are controllable. In order to make a successful project, you need the willingness to devote an enormous amount of time to it. The first thing you need to pay attention to after the development of the idea itself is the assessment of the adequacy and feasibility of the project. You should study the competitiveness of the created project, as well as learn how to plan and allocate resources. Ideally, a startupper achieves maximum results with minimum investment.
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Many startups have great ideas, but sometimes they don't have enough funds to implement them. Therefore, someone still goes ahead and achieves his plan in any case, while others refuse it. We believe that if you have an excellent fresh idea, well thought out business plan, but no funds, then you should find funding from third parties or organizations. Below is the list available options startup project financing.
Remember that not only the method of financing, but also the timing of financing a startup project must be right. Mindlessly collecting money can lead you into dangerous situations.
Before a new business owner can raise capital for their startup, they must analyze the various sources of funding, find the one that is most compatible with your needs, requirements, and stage of development of your project.
Funding for creating a product, bringing it to the market can be obtained from business angels who are ready to invest their money at an early stage of startup development. As a rule, such funding does not last long.
There are other financing options where you can receive funds for the development of your business for long periods of time from so-called financial institutions.
Funding and fundraising options for your startup project
Invest your own savings
When you can afford to spend your own funds on the creation and development of your startup project, this will the best option as you will be the sole recipient of the profit.
Help from friends and relatives
If you do not have enough of your own funds, you can turn to your friends and relatives for help. If you have established yourself as a reliable person, then you have a chance to receive funding for a startup project from this source. But make sure you take money from those who can afford to lose it, because there are a lot of startups that fail. Also, be prepared to discuss issues related to your business in a family get-together.
Help from banks and other financial institutions
You can also take out a consumer loan from a bank by submitting your business plan. Another option is to get a secured loan. Some microfinance companies provide loans, but at very high interest rates.
Incubators and accelerators
In many developed countries there are incubators and accelerators created by the government, educational institutions or large corporations. You can contact them with your idea. In case of a positive decision, you can receive not only funding for a start-up project, but also an office, equipment, and a place in the laboratory. The development of your startup project will be supervised by the most smart people in the world of startups, you will receive advice on promoting and managing a business. You can become part of a huge network by getting to know potential clients and partners.
Crowdfunding
Crowdfunding (English crowdfunding - “popular financing”, “crowd” - literally “crowd”) is a method of collective financing based on voluntary contributions. (Wikipedia). The initiator of crowdfunding asks to finance his project, the product of ordinary people. For this, specialized Internet sites are used.
The development process of the project is publicly reported. Contributions are made free of charge, although some bonuses may be promised to people. If within a certain time the required amount or a pre-agreed part of the amount, then the money already received is returned to their owners. The downside is that it takes a long time to collect money, the money will go to the startup only after the final collection, you need to constantly promote your project.
For the second round of funding for a startup project, other options are needed. With a longer period.
Venture Capital
If you have successfully completed the launch phase of your product, are already generating initial revenues, have a professional team, and a clear strategy to eventually sell the business or enter the IPO market, then you need funding from pro venture capitalists (VCs).
Keep in mind that venture capitalists are looking to get their money and profits as quickly as possible. They are a great source if you're planning for explosive growth and need funding to get there.
Venture capitalists are usually willing to invest in the range of 20% of the shares of a realized startup project. They study the business in which they may have to invest quite closely. Typically, only 1-2% get approved. Prepare to be flexible if you want to make a deal with some venture capitalist.
bail financing
Long-term loans can be secured by commercial banks secured by property or assets. The pledge can be real estate, any property, shares, gold, and leasing can also be used. Loan for future business can also be obtained under the guarantee of a legal or natural person.
Equity financing
Equity financing is the attraction of additional financing from the outside, when the investor becomes a co-owner of a block of shares participating in the turnover on the stock market, and then shares the profit with the main investor. The main advantage of equity financing is that the business is not required to return the money. Instead, investors hope to get their investment back from future profits. The main disadvantage of equity financing is that investors become co-owners of the business and thus have a say in business decisions.
Initial public offering (IPO)
Also referred to as an “initial public offering”. IPOs often involve small, young companies seeking capital expansion, but can also be large companies looking to go public. IPO has its own regulation and rules, because the general public becomes participants in the development of the company.
