Crowd Funding, Micro-funding, New Approach for Investors - Alternatives to Wall Street

(3) Negotiation: Once you’re sold on the founders and have found enough evidence to suggest the business will succeed, the next step is hammering out finances. How much money does this founder want/need? What kind of valuation would they accept? You’re not going to finalize things at this stage, but roughing out a basic set of terms is pretty straightforward.   "Money will chase opportunity."  Note: It’s absolutely critical that you remain 100 percent honest during this entire process. If you represent to startups that you work for a VC firm, or suggest any relationship that isn’t recognized by the VC, you’ll instantly be blackballed. Likewise, don’t make claims about being on the team when talking to the VCs. Clearly explain what you’re doing to all parties. When in doubt, disclose. Your reputation is in the balance.

(4) Financing: Now you might be thinking this is where my crazy notion of being an independent VC will fall apart. Unless you can bankroll the company independently, you’ll need to find some monied investors who are willing to take a risk, right?  This sounds hard, but money will chase opportunity. If you can find compelling companies, explain why the market is attractive, why this team is equipped to dominate that market and present a framework for a deal, there will be plenty of angels or firms willing to cut a check or, at least, take a meeting.  You’ll want to be on the radar of these folks before asking them to look at any of  your “deals,” but after a couple of high-quality intros, they’ll be eager to hear from you.

Much more to read and understand in the article before you attempt this being a VC without the Capital, but I can professionally tell you that it is a worthwhile read.

According to data from the Kauffman Foundation, 2015 has marked the first year startup activity has been on the rise since the Great Recession. In fact, it’s soaring — the numbers show we’re living through the biggest upswing in new companies, products, business deals, and jobs in the past twenty years.  That makes it sound like now is the perfect time to bring your million dollar idea to market — but how is that even done?   -  1st off, begin by casting aside any fears that you can’t make a dent in the tech universe with little computer prowess.“We’re seeing more and more people enter the tech space because the definition of tech continues to grow,” says Michele Markey, vice president of Kauffman FastTrac, a global network of advisors helping entrepreneurs launch and grow companies. She’s seen everything from medical devices to mobile apps launch from Main Street as much as Silicon Valley, and that’s a trend many expect to continue.    1. Eying the competition:  It may not sound as exciting as a weekend-long hackathon or a giving a flashy presentation to a bunch of investors, but the reality is that most startups live and die based on early research. Scoping out the competition is vital to understanding where there’s an opportunity to make a move. This can involve everything from dissecting competing products to improve upon their designs or simply mapping out their locations to find a new way to reach underserved customers.   2. Finding and defining customers:  Markey says startup founders also conduct research by hitting the bricks and talking to would-be customers about their ideas. “A smart entrepreneur needs to figure out where their sweet spot in the marketplace is,” she says. “Who is that customer that’s going to use the product, pay the money, and maybe be the repeat user?  

3. Shoring up intellectual property:   Padlocking your product or service with an array of patents, trademarks, or copyrights can sound terribly dull, but the truth is it’s one of the most important steps to ensuring a budding company’s success. Without these protections, a competitor can swoop in and copy an idea without having to pay a dime for all the hard work done until this point.  And finally, startups are also wise to copyright their reproducible works. Whether it’s an paperback, and e-book, or even an image, if it can be duplicated, it should be protected. That may sound like a publishing industry problem rather than a startup issue, but as TechCrunch noted last year, it only took four hours for copyright law to crush one particular startup’s dreams.