These are exciting times for entrepreneurs. Though it is no walk in the park, more and more people are turning to entrepreneurship and working on exciting ideas that could be large and successful enterprises. Today, businesses have access to capital in the form of angel, venture and growth capital, provided their business models are proven and reasonable, they have a team to execute and are building sustainable organizations. And, of course, there are friends, family and fools.
As an angel investor and consultant, I have been investing and advising startups for a while. I get to meet enthusiastic entrepreneurs and teams looking to raise capital. Several of these are good businesses, but are not necessarily fundable by venture funds or angel groups. Investors and financiers define ‘being fundable’ differently; individual angel investors may fund a startup that is not necessarily attractive to venture funds. What is fundable by venture capital or private equity may not be fundable by angels or individuals, and what is not fundable through equity may be fundable through debt. As a first step, I always tell entrepreneurs and companies that they need to analyze and understand why their startups or businesses may be fundable. This saves time, avoids disappointment, and allows you to focus on building your business.