This document provides an overview of various funding options for starting a business, including bootstrapping, tapping friends and family for investment, applying for small business grants, taking out loans or lines of credit, working with business incubators, raising money from angel investors, pursuing venture capital, using bartering, forming partnerships, committing to major customers, and using crowdfunding and pre-sales to generate startup capital. Specific platforms like AngelList and Dreamplex incubator are also mentioned.

1. Session 4: Basics to Starting a Business,
Capitalization, Investment, Angel, VC,
Crowdfunding, and Crowd Sales
Presented by Niels Brock California International Business
University
Innovation &
Entrepreneurship Week

2. TREND
• This session is a key transition for those who are
ready to develop their business with practical
guidance and examples provided for the start-up
process, generating supportive funds, pre-sales
validation, and revolutionary alternatives to
traditional financing that offer so many more the
opportunity to start their own business.
• The transition from today’s session to your success
is a 12 step critical path to start-up.

3. Bootstraping
• Self-funding from your savings (if you have it) is
always preferred.
• Advantages: no time going hat-in-hand to investors
and you don’t have to relinquish any control in your
company.
• Disadvantages: you take on full risk, and will likely
be limited in resources necessary.
• For more on how to bootstrap, check out Bootstrap
Business by Rich Christiansen, who has launched
nearly 30 companies by that method.

4. Friends & Family
• Tap your inner circle before expanding your
horizons.
• As a rule of thumb, professional investors like to see
real skin in the game – your own, and/or that of
people who trust you.
• Advantages: there’s a level of trust, assurance, and
some helpful pressure involved
• Disadvantages: these investments can place
pressure on friendships and the family dynamic

5. Small Business Grants
• This bucket often gets overlooked, but it should be a
major focus thanks to the Obama administration’s
initiatives to foster new alternative-energy sources and
other technological breakthroughs. Nabbing federal or
state funds can be an exhausting gauntlet (check out
“One Energy start-up’s Tireless Quest For Capital“), but
at least the government doesn’t charge interest or
demand control.
• One smart approach: Team with a professor at your local
university. Grants associated with commercializing
products are favored over ones allocated for academic
study only. If a professor does the application with you
and get to publish the results, that’s a win-win situation.

6. Small Business Grants
Making Finance More Accessible
• IFC helps commercial banks expand their product
portfolios and lending to rural, small and medium
enterprises as well as providing trade and energy-
efficiency financing.
• IFC’s advisory work shaped Vietnam’s first private credit
bureau and led to the establishment of an online registry
for movables assets, enabling banks to make quicker
loan decisions and expand financing for smaller firms.
• IFC supports the development of Vietnam’s capital
markets and mobilize long-term financing for investments
that have strong socioeconomic benefits.

7. Loans or Lines of Credit
If your company needs only a temporary or small
infusion of cash, try for a Small Business
Administration loan (offered at a lower interest rate
because it is guaranteed by the government) or a
bank line of credit.
Warning: Commercial banks are often dismissive of
start-ups unless you have personal collateral at risk–
say, your house. (For more on understanding what
bankers really charge, check out “The True Cost Of
Debt.”)

8. Small Business GrantsTailored Advice – Adding Value Beyond Financing
• Corporate governance and risk management
• Enhancement of the business regulatory environment
• SME banking products
• Sustainable business practices
• Public-private partnerships
Financial Products
• Loans
• Equity
• Quasi-equity/convertibles
• Trade finance
• Risk guarantees
• Energy-efficiency financing

9. Small Business GrantsTailored Advice – Adding Value Beyond Financing
• Corporate governance and risk management
• Enhancement of the business regulatory environment
• SME banking products
• Sustainable business practices
• Public-private partnerships
Financial Products
• Loans
• Equity
• Quasi-equity/convertibles
• Trade finance
• Risk guarantees
• Energy-efficiency financing

10. Incubators
A start-up incubator is a company, university or other
organization that ponies up resources–laboratories,
office space, consulting, cash, marketing–in exchange
for equity in young companies when they are most
vulnerable.
(For more, check out “Getting The Most Out Of A
Business Incubator.”)
http://www.fastcompany.com/3027636/4-major-
benefits-of-startup-incubators

11. Incubators
The first business incubator opened in the U.S. in
1959? Now flash forward to today and there are more
than 7,000 incubators worldwide.
For decades, they have been helping startups with
everything from technology training, crafting pitches,
gaining knowledge from advisors, networking, office
space and obtaining seed money.
It’s also been found that “the survival rate of incubated
firms can be more than three times higher than non-
incubated firms.”

12. Incubators
The first business incubator opened in the U.S. in
1959? Now flash forward to today and there are more
than 7,000 incubators worldwide.
For decades, they have been helping startups with
everything from technology training, crafting pitches,
gaining knowledge from advisors, networking, office
space and obtaining seed money.
It’s also been found that “the survival rate of incubated
firms can be more than three times higher than non-
incubated firms.”

13. The Concept
At the time, there was no place for creative influencers,
entrepreneurs, and businesses that appeal to and serve
the contemporary consumer to meet, network, share
their work, develop concepts, and sales.
PreFAB provides this market access to many of the
opportunities to network, collaborate, learn and conduct
business to which the bio-tech, communications, and
tech fields in San Diego and Southern California have
access.
PreFAB is a unique space for creative, commercial, and
cultural style leaders to meet, collaborate and work
within the inspiring and iconic backdrop of the historic
San Diego Police Headquarters and CSI lab.
PreFAB is designed to enable local, regional and US
manufacturers to identify and differentiate themselves,
and while introducing consumers and merchants to these
products.

14. A Southern California showcase for rotating gallery exhibits • pop-up displays
• business and product concept workshops • consumer and retail customer
experiences and sales • idea generation in a collaborative environment.
Markets
• Emerging Lifestyle Brands
• Creative Designers & Artisans
• Broadcast & Print Media
• Online Medias, Bloggers & Trendsetters
• Fashion, Design & Merchandising Students

15. The Experiences
• Pop-Up Displays
• Conceptual Product Incubator
• Product Visualization
• Experience for Up & Coming
Designers, Retailers &
Merchandisers
• Product Sales Showcase
• Training & Learning
Environment

16. Creative Space for Inspiration

17. The Conceptual Space

18. The Actual Space

19. The Actual Space

20. Incubators - Dreamplex
Dreamplex fills three floors of the Miss Ao Dai office building
in the heart of District 1. Set in a former Spa, the space was
gutted and completely redesigned with startups in mind.
Despite the corporate exterior, when the elevator doors open
to Dreamplex, you enter a completely different world.
The walls of the space are decorated with inspirational quotes
and various pieces of art, some street style and others simply
adding to the character.
There are a variety of rooms, for small groups to take calls,
for larger meetings, and for individuals to crank out some
work. The collective vibe of the design and layout is that any
and every time of working environment is accommodated. It’s
impossible not to get pumped up while working.

21. Incubators - Dreamplex

22. Angel Investors
For those looking for $25,000 to $250,000, angel
networks can come in handy. Networking is critical
here, and you need to find angels who understand
your industry and share your passion. I’ve been on
the selection committee of an angel group for
years. To get started, go to www.AngelSoft.net and
look up the group nearest you. (For more on
raising money from angel investors, check out “Ten
Ways To Attract Angel Funding” and “ Wooing And
Choosing The Right Backer.”)

23. Angel Investors – Angel.co

24. Angel Investors – Angel.co

25. Venture Capital
As a rule of thumb, don’t try this one in the earlier
stages; in fact, don’t try it unless you need more
than $1 million. VCs take their pound of flesh in
equity and control.
It’s not the most efficient route, either: Prepare to
spend at least six months searching for and closing
the deal. Start your search within your local
network of entrepreneurs. After that, hit the
National Venture Capital Association Web site.

26. Bartering
Exchanging goods or services as a substitute for
cash can be a great way to run on a little wallet.
Example: trading free office space by agreeing to
be the property manager for the owner.
This technique can also work with legal,
accounting and engineering services. (For more,
see “Nine Effective Bartering Techniques.”)

27. Bartering

28. Form a Partnership
A more established company may have a strategic interest in
helping to develop your product—and be willing to advance
funding to make it happen. I know several companies that
develop customized social networks for large enterprises, with
the expectation of using that funding and experience to
compete in the consumer market some day. Licensing may not
be as sexy as being a consumer brand, but it will cost you a lot
less. (For more on navigating partnerships with large
companies, check out “Top Tips: How Not To Bet Burned By
The Big Boys.”)

29. Commit to a Major Customer
Some customers would be willing to cover your development
costs in order to be able to buy your product before the rest of
the world can. Their advantage: control over your production
process (to make sure it meets their requirements) and the
promise of dedicated support. Even large companies look to
their best customers to fund new projects–this is the essence
of good business development.

30. Crowdfunding & Sales
Crowdfunding is the practice of funding a project or venture by
raising monetary contributions from a large number of people,
today often performed via internet-mediated registries, but
the concept can also be executed through mail-order
subscriptions, benefit events, and other methods.

31. Crowdfunding & Sales
Crowdfunding is a way of raising finance by asking a large
number of people each for a small amount of money. Until
recently, financing a business, project or venture involved
asking a few people for large sums of money. Crowdfunding
switches this idea around, using the internet to talk to
thousands – if not millions – of potential funders. Typically,
those seeking funds will set up a profile of their project on a
website such as those run by our members. They can then use
social media, alongside traditional networks of friends, family
and work aquaintances, to raise money. There are three
different types of crowdfunding: donation, debt and equity.

32. Crowdfunding & Sales
Donation/Reward Crowdfunding
People invest simply because they believe in the cause.
Rewards can be offered (often called reward crowdfunding),
such as acknowledgements on an album cover, tickets to an
event, regular news updates, free gifts and so on. Returns are
considered intangible. Donors have a social or personal
motivation for putting their money in and expect nothing back,
except perhaps to feel good about helping the project. UK
Sites include: www.banktothefuture.com www.buzzbnk.org
www.crowdbnk.com www.crowdfunder.co.uk
www.gambitious.com www.justgiving.com www.peoplefund.it
www.pleasefund.us hubbub.net

33. Crowdfunding & Sales
Debt Crowdfunding
Investors receive their money back with interest. Also called peer-to-
peer (p2p) lending, it allows for the lending of money while bypassing
traditional banks.
Returns are financial, but investors also have the benefit of having
contributed to the success of an idea they believe in. In the case of
microfinance, where very small sums of money are leant to the very
poor, most often in developing countries, no interest is paid on the
loan and the lender is rewarded by doing social good.
Sites include: www.abundancegeneration.com
www.banktothefuture.com www.buzzbnk.org www.trillionfund.com

34. Crowdfunding & Sales
Equity Crowdfunding
People invest in an opportunity in exchange for equity. Money
is exchanged for a shares, or a small stake in the business,
project or venture. As with other types of shares, apart from
community shares, if it is successful the value goes up. If not,
the value goes down.
Sites include: www.angelsden.com www.banktothefuture.com
www.crowdbnk.com www.crowdcube.com www.ethex.org.uk
www.gambitious.com www.microgenius.org.uk
www.crowdmission.com www.seedrs.com www.sharein.com