By Ismet Balihodzic
Choosing someone to start a business with is a lot like choosing who you want to marry. You’re going to spend countless hours together and there will often be disagreements, but ultimately you know that you are both working toward a common goal — whether that is a successful business venture or a happy marriage. And if you need a technical co-founder?
If you’re building a tech startup and you don’t know how to code, you’ll need to find the elusive technical cofounder who can partner with you to bring your product idea to fruition. These days, finding a technical cofounder seems to be the equivalent to finding the Holy Grail. Every entrepreneur with an idea proclaims she could be starting the next Facebook if only she could find a technical cofounder?
But with demand for technical talent at an all time high, your startup doesn’t stand much of a chance of finding a first-class technical co-founder. Instead, you need to focus on attracting one.
The first step is getting into the right mindset: Stop right now with thinking you have the best idea and that this is all it takes. You may very well have the next game-changing idea, but that’s missing the point. A technical co-founder wants to build your company with you, not for you. So you need to show prospective co-founders more than simply an idea, and you need to make them feel like they will be part of that idea, not just working for you.
So, before jumping into business together, you should check some essential qualities in your future cofounder:
- Complementary skills – The most common response we received from co-founders was to look for complementary skill sets in your business partner. You should look for someone whose strengths balance our your weaknesses, and vice versa.
- Mutual respect – You should choose someone whom you respect, and someone whom you think is equally as intelligent and hard-working as you.
- Alignment of Mission and Passion – It’s obviously important for both co-founders to be invested in the company, but making sure your goals are aligned is essential. You should also ensure that you both are on the same page regarding the future of the company.
And finally, it is essential to find a co-founder you trust unconditionally — someone who will take the pitfalls in stride and adjust gracefully.
Remember, you need to treat a technical co-founder like a true partner, not just the person who will write your code. The key to attracting talent is to show real, tangible progress and commitment.
By Ismet Balihodzic
Are you looking for money in all the wrong places? Banks, angel investors and venture capitalists don’t seem too willing to put their faith in eager entrepreneurs these days. So, if you’re tired of hitting funding hurdles, give crowdfunding a try.
What is crowdfunding?
It’s an increasingly common practice that allows entrepreneurs to bypass angel investors and venture capitalists by directly asking people to invest in their company, typically online. The investors are regular people who chip in small amounts of money to help you achieve a stated monetary goal, simply because they’re inspired by your idea and want to see it grow.
Based on the principle of crowdsourcing.
An example of a crowdsourcing model is Wikipedia, an online encyclopedia that is completely written by users, containing over 3 million articles in English. A large number of people all put a little effort in reaching a big goal together. Some famous crowdfunding initiatives are SellaBand and KIVA, but also president Obama used the power of the crowd to fund his election campaign in 2008 and raised 137 million dollar by using crowdfunding!
How does it work?
1) Choose your funding model
If you choose the donation model and decide to offer rewards, you will need to think about the ‘tiers’ you offer.The more money people give you, the ‘better’ the reward you offer them. Think about how and when you will deliver rewards to the individuals that make up the crowd.
2) Write a good pitch
Perhaps the most important element is the initial script on the campaigns page. No matter the model you choose, your writing needs to draw the attention of the reader. Think carefully about what you are going to say and how you want to present yourself.
3) Keep your crowd updated
It is essential you keep the crowd informed of your progress throughout your campaign. Steady publicity is vital. You don’t want a situation where you almost get to the target, but then simply run out of steam.
4) Plan your timeline carefully
Since most crowdfunding websites ask you to set a time limit for your campaign, you should plan this timeline out carefully. Think about when you want key events to happen, like updates or certain target milestones.
5) Plan for the end of your campaign
So, you have successfully raised the target amount for your project – now you have to deliver on the promises you have made.If you went over your target, this may include promises about what you are going to do with any extra money you have raised.
And if it doesn’t work? PLAN B
Equally, when thinking about the end of your campaign, you should ensure you have a ‘Plan B’. If you fail to raise the target, what are your options? How will you continue to get support for the project? These are the questions that most people put off until the end of the campaign. By then, if things haven’t gone to plan, they are often ready to give up altogether.
Remember, there’s nothing to stop you from trying again. Perhaps a different website would be better, or just waiting until the time is right for your project. These are issues that must be taken into consideration in any good plan.
One of the key questions that first-time business owners ask is how to finance a business. The task of raising money for a business is not as difficult as most people seem to think. This is especially true when you have an idea that can make you and your backers rich. There are many small business financing options, each with their own advantages and disadvantages. Here’s a brief summary of startup business financing alternatives.
When first getting started, many entrepreneurs use “bootstrapping,” which means financing your company by scraping together any personal funds you can find. This typically includes your savings account, credit cards, and any home equity lines you may have. Actually 68% startups come directly from the pocket of business owner.
- Friends, Family & Fools
If your business is truly in its “idea stage” and you are just getting started, you should likely turn to these three sources: Friends, Family and Fools. The SBA does not fund ideas or start ups and for the most part neither do Angle Investors. If you have a great idea that needs some financing you are going to need to at least get a prototype built of your product or service before seeking financing from larger institutions like VCs, Angles or Banks.
If you have a tech start-up, you’ll probably eventually need more capital to really get going to hire peopleor get office space, for example than bootstrapping will afford you. You’ll likely need to reach out to outside investors. A good place to start is angel investors, usually established business professionals with high net worths who are looking to invest in promising companies. Typically, an angel will invest anywhere from $10,000 to a few million dollars.
For most startups, getting a traditional bank loan is a long shot. That’s because banks typically will only consider companies that have been in business for two years. What’s more, they need to see a tangible asset that can be used as collateral. The exception is a manufacturing company building or using heavy equipment. The founder should try also with Industrial banks. They are usually much more amenable to making business loans than regular banks, so be sure to check out these institutions in your area.
Are you looking for money in all the wrong places? Banks, angel investors and venture capitalists don’t seem too willing to put their faith in eager entrepreneurs these days Crowdfunding, put simply, means you are raising money by persuading “the crowd” to contribute to your project or business idea. In this sense, cash-strapped entrepreneurs have been using crowdfunding for a long time.
The main rule of the game: Anytime you want to raise money, your first move should be to put together a proper business plan. This business plan should include a resume of your background, your education, training, experience and any other personal qualities that might be counted as an asset to your potential success.
This business plan will have to state precisely what you’re offering the investor in return for the use of his money. Any way you choose you should be able to answer these questions about investors:
How much do you want them to put in?
How much would they get out?
How fast would they get out?
How sure they can be that they would get out?
An investor uses his money to make more money. He wants to make as much as he can, regardless of whether it’s a short term or long term deal.
Finding funding can be the hardest part of getting your business off the ground, but also the most rewarding. Once you’ve saved, gotten approved for a loan, or found other people to invest in your business, you can get back to or start your dream job!
“How to Raise Money for Your Business with Crowdfunding” via @GrowAmerica
“How to finance and start a business” via @BrianTracy
By Ismet Balihodzic
Are you wondering when is the right moment to quit your day job and become a full-time entrepreneur? A lot of entrepreneurs start pursuing a venture on weekends and in the evening. Think about the most important service provider startup and home-based crafters whose products’ line catch on and develop a following large enough to justify their full-time attention. Others take the plunge directly into full-time entrepreneurship because they can’t afford to be distracted by a day job and need to demonstrate their commitment to their business concept.
Experts are divided on this point, but the majority says that you should test everything before the launch of the company. So, allow yourself the space to plan, do, and review while you still have full-time employment. However, because of passion and commitment, some employees choose to leave the firm employing them in order to start their own business as the means to develop their own ideas.
One of many examples of people who have left their job to peruse an idea is Jeff Bezos. He quit his well-paying job for a New York City hedge found to follow his e-commerce project. Today, Jeffrey Preston Bezos is the President and the Chief Executive Officer of Amazon.com, a company that is playing a key role in the growth of e-commerce. Under his guidance, Amazon.com became the largest retailer in the World Wide Web and the model for Internet sales.
Sometimes ignorance is really a bliss
Deciding what is the ‘right time’ to start is difficult, but once you have analyzed the situation, studied all the consequences, and really believe in your idea you should have the courage to take risks! Even if you feel too green to jump right in and start.
- When you’re starting up, ignorance makes you more creative, unique, and effective
- When you go into something new without lots of knowledge about who was there before, you aren’t held back by the way it was approached before
This opens you up to greater possibilities so you’re more willing to take bigger risks, with bigger rewards.
Finally, according to Richard Branson, every entrepreneur needs to have a few lucky breaks to start a successful company. To create a business you’ve got to work day and night, weekends and holidays. It’s hard work. But lots of people do that and don’t succeed. So, those who have succeeded, do need to thank their lucky stars for the breakthroughs that got them to the top. But remember, don’t underestimate the importance of preparation and persistence.
“Ambition is the path to success, persistence is the vehicle you arrive in.” – William Eardley IV