We’re So Money…Or I Mean, We So Need to Figure Out the Money IssueApril 22nd, 2011 | Uncategorized | No Comments »
Our little enterprise at KikScore is growing. We have a long list of customers and are in process of integrating with several different channels. That’s the good news for our business. The bad news is that we’re just starting to charge for the service and we constantly throwing in our own cash to feed the growth. Like it or not, we need to make a decision about funding. And it’s looking like our choices are pretty familiar to other growing startups: Friends and Family vs. Angels vs. Venture Capital vs. Self Funding. After talking to several capital sources and other startups, here’s my analysis of these choices:
Friends and Family: First thing, you don’t actually be related or friendly with this investor group. It’s a group of people you know that have money. You may get money from this group, but it may not enough to fully fund the venture and the investors may not be completely clear on the risks of a startup investment.
Angels: This group is certainly aware of risks of their investment and have ready access to capital. But they are generally less willing to fully fund a venture (compared to Venture Capital), but are still in your business. So you now have a boss, but not the free-flowing cash to stock up your office with cool gear and get a SuperBowl ad.
Venture Capital: You get the money and the contacts. But everyone is going after investment from the top VC outfits…and they are generally looking for a business that has a strong balance sheet, several partners and a lot of buzz. In other words, a business that doesn’t need the money.
Self Funding: You’re the boss, you control your business completely. And you’re constantly kicking in money.
After contemplating the options, we’re sticking with option #4…unless you want to just gift us some money with no strings attached.