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December 29, 2022 UncategorizedBy Authorr

The most important things you should know as a startup founder

Building a startup is not an easy task. Founders witness new experiences, learn from their mistakes, and go through various ups and downs. But when we talk to these founders personally, most of them often have very little knowledge about crucial things they must be aware of. So to simplify your life as a startup founder, we are here to tell you 10 critical learnings.

Prepare a business plan

Planning is the first step on the ladder of success. Most of the fastest-growing companies in the world have solid business plans. Having a business plan does not guarantee success but having the right business plan does. Your plans should be flexible. They should have the ability to forecast changes and measure the success of the enterprise.

Do legal stuff

Getting your legal framework set up is important. What your legal liabilities would be, how you would be paying taxes, what your restrictions are, and others. You must take assistance from a professional lawyer or a law firm so that you don’t face high penalties later.

Focus on the cash flow

As an aspiring startup founder, you must pay attention to the cash flow. To keep going, the cash flow position must be favourable. Positive cash flow ensures you can finance and cope with your mistakes without hassles. For this, you must hire a professional to do the cash flow projections for you. The predictions must be analysed from time to time and take corrective action when needed.

Books, books, and books

As an aspiring startup founder, you must read enough books and enhance your knowledge. We all know Warren Buffet. He insists every business person read at least 500 pages each day. But if you can’t read that much, start little and build over time. Reading doesn’t mean you must read business books solely. Try reading about psychology, go for audiobooks, etc.

Accept failures

In your entrepreneurial journey, there will be times when failures might hit you, making you feel demotivated. But you must note that it is a part of the process and the tough time may pass soon. A solid mindset to accept failure and standing again motivated is crucial. Also, do remember to have backup plans. Persistence, resilience, and consistency is the key to success.

Networking and connecting

The entrepreneurship journey can be lonely sometimes compared to a 9-5 job. Loneliness can be stressful. But this is not a compulsion. Networking with other business friends can teach you so many new things. There are times when you might get stuck in similar business situations. In such cases, your companions can help you overcome tough situations. After all, learning and growing together is never a bad idea.

Focus on one thing at a time

Paying attention to too many things at one time leads to specialisation in no industry. If your business deals in a particular industry/Services, focus on that Services/service/market rather than trying to capture more opportunities. Once you have enough of a client base, you can move on to the following things. But your core focus must be only one Services/service at the initial stages.

Know your competitors

Knowing and analysing your competitors is something you shouldn’t miss as a startup founder. Dive deep into how your competitors have reached where they are today. Make a plan of what exactly your Services will be, how it is going to rise above the competition, and how you will attract customers to your Services/service. Keeping an eye on your competitors will help you analyse what trends are prevailing in the market and much more.

Building a right team

Building the right team can take your business to the next level. You can choose to work with agencies, freelancers, or/and full-timers. Each one of them has its pros and cons. But which one to choose solely depends on your budget, the level of skills you need, the resources you have, the timeline, and so on.

Funding

It is one of the crucial decisions to make. You, as a startup founder, must know when you need additional funds and where to raise them. There are various options, like taking a loan from banks, issuing an IPO, etc. Bootstrapped companies must look for funding and think of expansion only when the Services is performing well in the market and has captured a decent market share. Don’t follow trends blindly if you feel you don’t need them.

December 27, 2022 UncategorizedBy Authorr

What should young entrepreneurs explore in this new decade?

Everyone should explore various opportunities and find the ones that are made for them. The key to being a successful entrepreneur is to explore. If you start exploring opportunities at a very young age, not only you’ll have more time to experiment but also the chances of your success increase.

If you are curious to know what you should explore at a young age in this 21st century, you are at the right place, my friend.

Today we’ll cover various aspects of entrepreneurship and by the end of this guide, we promise that you’ll have an answer to your question. So, keep reading till the end!

Have a learning mindset

One thing you shouldn’t adopt at any age of your life is having a stubborn mindset. And it can be your worst enemy during the initial stages of entrepreneurship. You must learn one new thing about business every single day. The more you can do, the better.

Acquiring new skills, learning new concepts, and having a deep understanding of the business world will never disappoint you.

Develop self-awareness

Building a deep sense of self-awareness is crucial. As an individual, you should know everything about yourself. Your strengths, weaknesses, mistakes, passion, etc.

Keep an eye on your actions and see what can be improved each day. Don’t strive to be perfect, instead focus on being better each day. Set goals, take action, and review them. Again take action. The cycle must go on.

Read, read and read

As an entrepreneur, books, magazines, journals, blogs and newspapers must be your all-time partner. Sure practical experiences are better but what books can teach you, it’s something different. The more you learn about the industry the better. Reading promotes innovative thinking. Innovative thinking is crucial for every entrepreneur out there.

Look for the right mentors

All mentors are good but you need to filter the ones that are experts in your industry. Mentors will guide you through your journey and help you in enhancing your career.

You may also take mentorship programs to learn new skills. And you must have someone who can review your actions and guide you accordingly.

Build a professional network

The early twenties is an age when you’ll be tempted to join a group of individuals who love to party. But that’s also the only age when you can build your career by joining a community of like-minded people.

You can join various entrepreneurship and business groups both online and offline. Connect with people on LinkedIn and see what and how they are doing in their careers. These professional people will surely help you in one way or another.

Understand business strategies

Along with learning business skills and having practical experience, you should also understand and develop business strategies. Developing business strategies will tell you what you are going to do in the future. And having a plan for the future is what drives you to success.

Take action

As a young and aspiring entrepreneur, you must not be afraid to take action. Taking action will only tell you what you are doing, how you are doing, and what is wrong/right with your strategies. If you have a plan in your mind, look for resources and just implement it. You must be saying what if it goes wrong?

But what if it goes right? What if it goes as planned? What if it goes successful? You never know. Your failure will tell you your mistakes and just remember, you have nothing to lose at this point in life. So, go on!

Ask for feedback

Young people often do not ask for feedback because they are shy or not ready to hear real reviews. But this kind of mentality will not get you where you wish to be.

You can ask for feedback from your employees, customers, peers, etc. and work on things that need your attention.

Getting constant feedback, suggestions, and insights and improving on your downfalls will take you one step ahead each day.

Conclusion

No one is a born entrepreneur and not everyone can be an entrepreneur. If you want to excel in your field, you must adopt the above-mentioned habits at a very young age. And remember that not every opportunity is for you. Don’t strive to be perfect but become good at what you do each day. Results can be only achieved if you remain consistent with your efforts without losing hope.

December 15, 2022December 15, 2022 UncategorizedBy Authorr

HOW NECESSARY IS SEED FUNDING FOR A STARTUP?

Year in and year out, many small to medium-scale businesses come to life. However, not all of these establishments stand the test of time. Funding is one of the major issues leading to the fall of small businesses. From an overview, most startup runs begin with the personal savings of the founder, or founders, as the case may be.

Only a few have exciting business ideas that will make them fit position strategically, pitch themselves and attract investors. Investors who get an equity share after investing in a business are said to have contributed seed capital.

In this article, we will define seed funding and answer some of the questions that startups have about it. So, shall we proceed?

WHAT IS SEED FUNDING?

Seed funding is otherwise called seed capital or seed money. It refers to the sum of money pumped into a business by an investor, usually in exchange for an equity share. The amount of capital an investor provides guarantees them a part of your trading profit.

Usually, depending on the contract terms, most seed-funding investors have a say in the Services and general business development process. Meanwhile, this may not be the case as they can choose to be a non-participating shareholder.

Seed funding dates back to the early ages before civilization. In those times, parents and older siblings invested in their childer or younger ones. This form of seed funding often comes with a non-expectancy bid for returns. Instead, a call for return is usually a form of discipline to keep the young trader or businessperson with the zeal to make profits amidst all odds. One of the sources of this type of seed funding is Africa. In West Africa, there have also been examples of husbands setting up their wives’ enterprises by donating seed money.

As expected, seed funding has advanced with the social transformation from agricultural economies to industrial societies. Startups and corporate bodies have adopted the age-long culture of seed funding. It has become an integral part of their venture capital raising process. Investors are increasingly receiving rewards in the form of stock shares. What are equity shares, then?

UNDERSTANDING EQUITY SHARE.

Equity shares are also known as ordinary shares. It refers to fractional ownership that accrues an investor’s right to share profits and bear entrepreneurial liability as and when due. That is to say; equity share is the right of an investor.

For instance, investor A contributes $ 500,000 to business B as seed capital and is entitled to 15% equity. If the business grows $ 1 billion strong after ten years of entrepreneurial practice, investor A can also have accumulated $150,000,000 as revenue.

In the same vein, equity shares do not only give returns in terms of finances. It also confers the right to vote on the investor, who also doubles as a shareholder. Voting here means the free will to influence the policies and decisions made in board meetings or top management teams of a company.

IS SEED FUNDING NECESSARY FOR A STARTUP?

Yes, seed funding is necessary for a startup. It fastens the growth process and removes time constraints on business plans and strategies. It also gives a startup the financial confidence to hire the best talents and build a formidable team to help further its course.

IMPORTANCE OF SEED FUNDING.

As said earlier, seed funding refers to the sum of money generated from the inputs of investors in a business. They help a business, particularly a startup, to thrive and relieve it of its financial obstacles. Generally, seed funding is important to a startup because:

● It determines how to set goals that are achieved.

Funding is a significant problem faced by businesses. It also influences their plans, goals, and strategies. However, with seed funding, a startup can set expansionary and financial goals and achieve them.

Financial objectives can be both immediate and long-term.
Seed funding accelerates businesses heavy on social innovation and corporate social responsibility.

● It provides working capital to finance ongoing and abandoned projects.

Secondly, seed funding is the capital to finance ongoing and abandoned projects. In most cases, initiating projects is one reason startups call for seed capital. Old businesses also call out for seed capital to finance their ongoing project. Therefore, a startup or mainstream company needs to have a project with a super plan to easily attract investors who want to sow venture capital in their business.

● Seed funding is the capital to hire the best hands for the job.

Team building, after funding, is the heart of a startup. If a startup can get sustainable seed capital, it becomes easy to hire the best hands. Talents who can contribute technically to the growth and success of a firm are easily attracted when there is more than enough money to keep them. A startup with the best team is bound to record steady growth within its industry.

● It commands efficiency.

Sequentially, seed funding commands efficiency. Without enough working capital, most startups turn out to be inefficient. The gap that seed funding fills on the ground of efficiency is immeasurable. It also removes or substitutes labor-intensive practices for capital-intensive ones.

● It simplifies the process of birthing new ideas.

Another advantage of seed funding to startups is that they can easily birth new ideas. When money is available, startup founders and superstars can think of the best ideas to help them scale faster and bigger. It also gives them the free will to implement these ideas to get the best results.

● Startups can use seed funds to finance their business location.

Lastly, seed funding also paves well for building a startup’s identity. One of the best ways to define a business identity is by owning a space. With a seed fund, a business place, quality branding, and place marketing are easily done. Undeniably, a good place for your business also increases efficiency and gives you a clear view of things. Working from your place is forever an edge as a startup business or organization.

WHAT IS THE ALTERNATIVE TO SEED FUNDING?

Other funding sources for a startup include:
Retained earnings.
Angel investors.
Debt capital
Bank loans.

Some FAQs about seed funding for startups

Below is a list of some FAQs about seed funding for startups and expert-vetted answers to them:

How can I generate seed funding for my startup?

For startups, there are various ways to generate seed money. Some of these ways include publishing a prospectus to call for shareholders, fund pooling from business partners, pitching for grants in exhibitions, and personal savings of founders or founders, to mention a few. Another way to generate seed funds is through transfer payments. The government gives a transfer payment as a form of support for a venture without any expectancy or return. Mostly, they are given as support to startups or other existing businesses whose activities are innovative.

Is grant the same as seed funding?

Yes, a giant is a form of seed funding. Meanwhile, a grant does not usually attract a return when won in a pitch deck. Grants are given by individuals, businesses, and the government (either directly or through its agencies or parastatals) as a gift. A grant-winning startup is expected to use the money for business expansion and to boost its revenue.

Should all startups offer the same equity share?

No, all startups should not offer the same equity share. An equity share is a return that accrues to an investor. Therefore, the amount generated as projected revenue should influence a startup’s decision when measuring its equity share offering. Likewise, the volume of the seed capital contributed by an investor should also affect the share to be given to an investor. When these things are implemented, the startup will not run at a loss or lose most of its working capital to equity share payouts.

Is crowdfunding a form of seed funding?

Yes, crowdfunding counts as a type of seed money. It typically does not call for returns to the initial investors, just like grants, because they are received as gifts. Businesses frequently use crowdfunding to focus on social innovation projects like youth empowerment, child support or IDP, and rehabilitation financing.

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