Alternate Funding Sources

Alternate Sources of Funding MIT Enterprise Forum DFW Chapter 25 February 2010

Traditional Money Sources
Hip Pocket National Bank
Friends and Family
Angel Investors
Venture Capitalists
IPOs, Banks, Bonds, etc., etc.

Problems
Dilution of Ownership
Dilution of Intellectual Property
Debt

Two Alternate Funding Sources
Keep ALL ownership
Keep ALL intellectual property
Avoid ALL debt

The Best Money Source! SALES!

Design Your Business For SALES
Forget Product
Forget Finance
Focus on Getting PAID!

The Product Trap
Make the Perfect Widget
Ignore the Market

The Finance Trap
Find Investors
Ignore Dilution

Alternative Funding #1: Sales
It's not what you can MAKE
It's not what you can FUND
It's what you can SELL!

Services, not Products
Start a Service Company
Lower cost
Shorter lead times
Higher return
Don't Start a Product Company
Higher cost
Longer lead times
Lower return

Financing from Sales
Keep ALL ownership
Keep ALL intellectual property
Avoid ALL debt

Not Into Sales?
Do you have a Product Idea?
Do you want $100,000 to Test it?
Do you want $750,000 to Develop it?
And You own the Product!
And You own the Intellectual Property!
And You own the company!

The 2 nd Best Money Source! SBIR

Small Business Innovation Research
$2B Federal program for small businesses
$100,000 to test your technology idea
$750,000 to develop your product line
And then, Uncle Sam will buy your product!
With YOU as Sole Source!

SBIR Highlights
Eleven US Gov Agencies participate
DoD, NIH, NSF, NASA...
Grants or Contracts
Contract: You solve THEIR problem
Grant: You solve YOUR problem
Opportunities throughout the year
NIH, DOT open now
DoD, DOE open shortly

SBIR Workshop
MIT Forum event
27 March 2010, 9:30 am until 3:30 pm
University of Texas at Dallas
Speaker: Nick Lawrence
18 SBIR wins and counting
Log onto http://www.mitforum.com for details and registration

Summary
Best Money Source: Sales
2 nd Best Money Source: SBIR

Alternate Sources of Funding MIT Enterprise Forum DFW Chapter 25 February 2010

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Alternate Funding Sources

by mitefdfw on Feb 27, 2010

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