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Alternate Sources of Funding MIT Enterprise Forum DFW Chapter 25 February 2010
Traditional Money Sources <ul><li>Hip Pocket National Bank </li></ul><ul><li>Friends and Family </li></ul><ul><li>Angel In...
Problems <ul><li>Dilution of Ownership </li></ul><ul><li>Dilution of Intellectual Property </li></ul><ul><li>Debt </li></ul>
Two Alternate Funding Sources <ul><li>Keep ALL ownership </li></ul><ul><li>Keep ALL intellectual property </li></ul><ul><l...
The Best Money Source! SALES!
Design Your Business For SALES <ul><li>Forget Product </li></ul><ul><li>Forget Finance </li></ul><ul><li>Focus on Getting ...
The Product Trap <ul><li>Make the Perfect Widget </li></ul><ul><li>Ignore the Market </li></ul>
The Finance Trap <ul><li>Find Investors </li></ul><ul><li>Ignore Dilution </li></ul>
Alternative Funding #1: Sales <ul><li>It's not what you can MAKE </li></ul><ul><li>It's not what you can FUND </li></ul><u...
Services, not Products <ul><li>Start a Service Company </li></ul><ul><ul><li>Lower cost </li></ul></ul><ul><ul><li>Shorter...
Financing from Sales <ul><li>Keep ALL ownership </li></ul><ul><li>Keep ALL intellectual property </li></ul><ul><li>Avoid A...
Not Into Sales? <ul><li>Do you have a Product Idea? </li></ul><ul><li>Do you want $100,000 to Test it? </li></ul><ul><li>D...
The 2 nd  Best Money Source! SBIR
Small Business Innovation Research <ul><li>$2B Federal program for small businesses </li></ul><ul><li>$100,000 to test you...
SBIR Highlights <ul><li>Eleven US Gov Agencies participate </li></ul><ul><ul><li>DoD, NIH, NSF, NASA... </li></ul></ul><ul...
SBIR Workshop <ul><li>MIT Forum event </li></ul><ul><li>27 March 2010, 9:30 am until 3:30 pm </li></ul><ul><li>University ...
Summary <ul><li>Best Money Source: Sales </li></ul><ul><li>2 nd  Best Money Source: SBIR </li></ul>
Alternate Sources of Funding MIT Enterprise Forum DFW Chapter 25 February 2010
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Alternate Funding Sources

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Alternate sources of funding for entrepreneurs, bootstrapping - by MIT Enterprise Forum, Dallas Fort Worth. Nick Lawrence.

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Alternate Funding Sources

  1. 1. Alternate Sources of Funding MIT Enterprise Forum DFW Chapter 25 February 2010
  2. 2. Traditional Money Sources <ul><li>Hip Pocket National Bank </li></ul><ul><li>Friends and Family </li></ul><ul><li>Angel Investors </li></ul><ul><li>Venture Capitalists </li></ul><ul><li>IPOs, Banks, Bonds, etc., etc. </li></ul>
  3. 3. Problems <ul><li>Dilution of Ownership </li></ul><ul><li>Dilution of Intellectual Property </li></ul><ul><li>Debt </li></ul>
  4. 4. Two Alternate Funding Sources <ul><li>Keep ALL ownership </li></ul><ul><li>Keep ALL intellectual property </li></ul><ul><li>Avoid ALL debt </li></ul>
  5. 5. The Best Money Source! SALES!
  6. 6. Design Your Business For SALES <ul><li>Forget Product </li></ul><ul><li>Forget Finance </li></ul><ul><li>Focus on Getting PAID! </li></ul>
  7. 7. The Product Trap <ul><li>Make the Perfect Widget </li></ul><ul><li>Ignore the Market </li></ul>
  8. 8. The Finance Trap <ul><li>Find Investors </li></ul><ul><li>Ignore Dilution </li></ul>
  9. 9. Alternative Funding #1: Sales <ul><li>It's not what you can MAKE </li></ul><ul><li>It's not what you can FUND </li></ul><ul><li>It's what you can SELL! </li></ul>
  10. 10. Services, not Products <ul><li>Start a Service Company </li></ul><ul><ul><li>Lower cost </li></ul></ul><ul><ul><li>Shorter lead times </li></ul></ul><ul><ul><li>Higher return </li></ul></ul><ul><li>Don't Start a Product Company </li></ul><ul><ul><li>Higher cost </li></ul></ul><ul><ul><li>Longer lead times </li></ul></ul><ul><ul><li>Lower return </li></ul></ul>
  11. 11. Financing from Sales <ul><li>Keep ALL ownership </li></ul><ul><li>Keep ALL intellectual property </li></ul><ul><li>Avoid ALL debt </li></ul>
  12. 12. Not Into Sales? <ul><li>Do you have a Product Idea? </li></ul><ul><li>Do you want $100,000 to Test it? </li></ul><ul><li>Do you want $750,000 to Develop it? </li></ul><ul><li>And You own the Product! </li></ul><ul><li>And You own the Intellectual Property! </li></ul><ul><li>And You own the company! </li></ul>
  13. 13. The 2 nd Best Money Source! SBIR
  14. 14. Small Business Innovation Research <ul><li>$2B Federal program for small businesses </li></ul><ul><li>$100,000 to test your technology idea </li></ul><ul><li>$750,000 to develop your product line </li></ul><ul><li>And then, Uncle Sam will buy your product! </li></ul><ul><ul><li>With YOU as Sole Source! </li></ul></ul>
  15. 15. SBIR Highlights <ul><li>Eleven US Gov Agencies participate </li></ul><ul><ul><li>DoD, NIH, NSF, NASA... </li></ul></ul><ul><li>Grants or Contracts </li></ul><ul><ul><li>Contract: You solve THEIR problem </li></ul></ul><ul><ul><li>Grant: You solve YOUR problem </li></ul></ul><ul><li>Opportunities throughout the year </li></ul><ul><ul><li>NIH, DOT open now </li></ul></ul><ul><ul><li>DoD, DOE open shortly </li></ul></ul>
  16. 16. SBIR Workshop <ul><li>MIT Forum event </li></ul><ul><li>27 March 2010, 9:30 am until 3:30 pm </li></ul><ul><li>University of Texas at Dallas </li></ul><ul><li>Speaker: Nick Lawrence </li></ul><ul><ul><li>18 SBIR wins and counting </li></ul></ul><ul><li>Log onto http://www.mitforum.com for details and registration </li></ul>
  17. 17. Summary <ul><li>Best Money Source: Sales </li></ul><ul><li>2 nd Best Money Source: SBIR </li></ul>
  18. 18. Alternate Sources of Funding MIT Enterprise Forum DFW Chapter 25 February 2010

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