You’ve Started But Where To Go Now? (Part 2 Of 2)

In Part 1 of this article, we discussed the first four steps to a startup: putting together the business plan, getting a co-founder, registering, and hiring the early team. Here's a followup to the next steps in that ladder!

In Part 1 of this article, we discussed the first four steps to a startup: putting together the business plan, getting a co-founder, registering, and hiring the early team. Here's a followup to the next steps in that ladder!

Step 5: Find the Accelerator and Create the Prototype

Investors start investing when they either see a prototype or proof of concept.  Accelerators or Incubators mentor and fund you in these initial stages till you can take your prototype to the bigger investors.

Just a heads up: joining an accelerator should not be an automatic decision. It is not summer camp, and the decision should only be made when the accelerator is highly specialised in a relevant field or if the accelerator is one of the top tier of programmes AND if the founders are prepared to learn. The last bit is every important - for some startups, an accelerator interview is the first time their “billion dollar idea” has holes poked into it, and they’re too much in love with it to take constructive criticism or be “mentorable”.

Step 6: Bootstrapping vs. Raising Capital

Once your prototype is ready and tested or you have a proof of concept, you have to choose between bootstrapping (surviving on your revenue), or  approaching investors to raise capital.

Start with a pitch deck -  which is an overview of your business plan, generally in a PPT form (or Keynote / Prezi) and pretty brief (about 10-12 slides). This will help you deal with some important decisions here: how much capital should you raise? What kind of funding to go for - funds from friends and family, debt, or equity?

Psst, quick rule of the thumb: Before rushing off to that angel friend, take these words from entrepreneur and angel investor David Kalt, founder of Reverb.com, to heart:

If you believe in your idea, you should beg, borrow or steal before you take a dime from an angel. As an angel investor, one of the things that struck me was how rapidly and readily entrepreneurs would part with equity–and it made me wonder just how confident they were in what they were doing.

If you do decide to go for funding, you might benefit from these articles that discuss funding deal flow and valuation.

Step 7: Production, Branding and Marketing

Once you have funding you should concentrate on final product or service. You can complete the hiring of all the necessary personnel. Now you need to build yourself as a brand and start pre-launch marketing of your product or service.

Step 8: Go into full-scale production and launch

The only thing that now remains to be done once your final product is tested and approved, or your services are fully set up is to launch!

As you gear up to launch yourself into building an empire, here are some keywords that will help you on the way:

1. Founder’s Agreement: This is the key instrument to help you bring together your team. It contains necessary term and conditions of how the co-founders will work together.

2. Sweat Equity: Also understood as earned equity, this is the share in the company you give in exchange of the work done. It is a great way to attract talent and key resources.

3. Venture Capital: Every start-up finds themselves chasing a Venture Capitalist at some time or the other.  They are the ones who find small starting-up firms and invest the moolah into them. Not to be confused with angel investors, who do the same thing, but at an earlier stage, and at a lower amount.

4. Vesting: Vesting safeguards the interest of all co-founders and the start-up. It ensures that start-up provided equity is released to the co-founder or employee only over a period of time. This becomes an incentive to everyone to stay put and perform well with the company.

5. Value Proposition: The unique quality that sets your company or its offerings apart from others. Usually expressed in terms of figures: We have helped XX companies raise $XY amount in XX months of being listed!

6. Scaleable: Something that can grow big either due to the huge market for it or because of the direction you are steering it in.

Source: http://finda.photo/image/11255/thumbnail/original

This may seem like a lot, but take heart; the reward at the end is phenomenal too. Being a start up in present day is easier than olden times. Today everybody is connected, and guidance and help is easily available. All you need to do is hang in there and keep moving on. After all, “The only impossible journey is the one you never begin”.