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3 Strong Alternatives For Startups To Raise Capital

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Keeping with the same theme of bringing you worldwide game changers to help give your startup the best advice, I recently interviewed Jonathan Barouch from a company called Local Measure. With clients like Starbucks, McDonalds, Newscorp, Sydney Opera House, San Francisco Museum of Modern Art, Qantas and one of Disney ABC’s subsidiaries in the USA, they are now getting ready to expand into Europe. These organisations use Local measures platform to see engagement, manage customer service and help with publishing, and tracking of operational issues.

Local Measure is a local content platform that aggregates location-based content from social media, for brands and businesses to leverage. If you’re Newscorp and you want to have local content to support your editorial, then local measure is really good at grabbing local photos and videos from breaking news or a concert. You might be wondering if many people actually tag their location.

On a platform like Instagram, most people share their location or tag the event that they are at. Facebook has a much smaller number of users that tag their location and geotagging on Twitter is growing more and more.

If you were at the Sydney Cricket Ground for a cricket game, Local Measure could track where in the stadium a tweet came from and aggregate all the tweets around the stadium. This information could then be used by the stadium, team, sponsor or media to get a 360 view of all the content that was shared from that game. The only tweets that are visible in this example, are ones where the user has checked in or geotagged their location, which means it’s in the public domain. Local Measure’s technology then allows a brand to converse with the fans, engage with the influencers and grab all the content from the game to use on their website.

Local Measure’s technology then allows a brand to converse with the fans, engage with the influencers and grab all the content from the game to use on their website.

Being a tech startup, Local Measure didn’t take the usual route of raising money via venture capital and raised money through cash flow, a few different funds, high net worth individuals and a company listed on the Australian stock exchange.

1. Using cash flow to pay for growth

It’s often seen as very cool for tech startups to funds via Venture Capital and before they actually need to. However, the normal way that businesses raised capital for 100’s of years was to plow their profits back into the business, rather than taking money out or paying dividends.

If you had a cash flow positive business (where you are paid before you have to expend money on goods or services) there would be a cash float to fund the growth. A great example of this was Jonathan’s previous e-commerce business, which was one of the first flower and gift sites in Asia. Often customers paid up front for their order before special occasions like Valentines Day, but they didn’t actually need to deliver the goods until 4 weeks later.

This created a healthy cash balance which they could invest a portion of, for growth, on things like marketing. Even though this business didn’t create any profit in its first year, the following years were profitable and they invested this money back into their business. This simple strategy is often overlooked by entrepreneurs, but it’s a great way to raise capital.

If you’re not getting money in advance then this strategy can still work but it depends on how profitable your startup is. The choice you have to make is do you want to fund for growth, pay dividends or pay the founders a higher wage? The answer should be pretty simple; short-term pain for long-term gain.

Tips for improving cashflow
  • Invoicing on the first day of the month can be really helpful especially if you have corporate clients who might pay in 60-90 days. The quicker you get your invoice out the quicker you get paid.
  • Consider your payment terms and try and invoice a month in advance so that you have been paid before you have actually had to provide the service.
  • Negotiate with your existing debtors to see if you can change the payment terms more towards your favor (this is quite hard with corporates).Don’t get lazy with your receivables and make sure that you only have very minimal amounts of money owed to you at any one time. A great way to help with overdue invoices is to send out reminders to your debtors on one week and the on the alternate week, follow this up with a call to the payables officer within the debtors company.
  • Don’t get lazy with your receivables and make sure that you only have very minimal amounts of money owed to you at any one time. A great way to help with overdue invoices is to send out reminders to your debtors on one week and the on the alternate week, follow this up with a call to the payables officer within the debtors company.
 All of this helps fund your growth!

2. Private Equity

The simplest way to start is by looking to your family and friends to raise capital from. If this is not an option then you might go the next step, which is private equity.

Traditional private equity is middle age men in dark suits, sitting in big city offices, who run big funds or private equity firms. Private equity is now a lot broader and can really be anyone who has money to place in return for equity.

When you look for private equity you might find that your startup could be too small for some and too large for others. It’s a matter of having the meetings to work this out as you go. Don’t despair, if the private equity fund says you are not right for them, individuals within the fund could invest in you personally – this actually happened to Jonathan.

 “Pounding the pavement is the best friend of an entrepreneur”

A warm intro from family, friends, people you went to school with, people you went to university with, or even people you work with, are the best avenues to find someone to invest in you privately. There are quite
a lot of high net worth individuals and angel investors who will happily write cheques in the thousands to help you. These people are located in the USA, Australia, Asia and even starting in Europe now. This route is great for a Seed Round or even a Series A Round. If you’re a tech startup, once your past these rounds then Venture Capital is the next place to start looking unless you have assets which you can get debt over.

In Jonathan’s Local Measure business, he visited around 15-25 different sources of funding before he found the right one. Raising this money happened within about 48 hours because they had some large corporates already using their service. Having corporate clients can really help to give belief in your startup and raise money quickly.

“The better you’re doing, the easier it is to raise money”

Before approaching a bank, remember that most of them won’t lend money to early-stage entrepreneurs unsecured. A bank is a good when you want them to finance over a fixed asset like some computer equipment or stock, and they can use that asset as collateral (security). If you’re building a tech startup a banks probably going to be less interested in providing debt because it’s higher risk, even though it has a higher return. Funding growth, expansion or research and development, is just not what banks do.

If you don’t want to give away equity you can also look to raise money privately via some sort of debt facility where you pay a higher amount of interest (10%-15%). The downside of this is that you’re stripping out cash flow every month to pay back the interest.

 

3. Crowdfunding

Every country has a different landscape with crowdfunding. Places like the USA have lots of money available on these platforms, but obviously that comes with a lot more competition for that money at the same time. When looking at crowdfunding you need to choose the platform that best suits your product or service. A cool success story that Jonathan invested in and used crowdfunding, was Life X who had the lightbulb that you could control with your smartphone.

Kickstarter and Indiegogo

Both of these platforms are great when there is a physical product or service, and you’re raising money on the promise of delivering that product or service at some point. In this case, the crowdfunding is not really funding but more pre-purchasing. These platforms can also be a quick way to generate marketing or interest for your startup so that you can generate the cash to go and execute it.

Angellist

People put up their profile and their bio and keep it up to date. It’s like a mini LinkedIn for tech companies. As a tech startup, you can put out a call for funding and then angels can band together to fill up a round.

Our Crowd (John Medved)

They have their own fund and invest off their own balance sheet. They then split the rest of the equity across high net worth and angels. By packaging up the two methods, it makes it easy for startups to raise capital. On this site you upload all your financials, the story, the model and a video, and then investors login to the site to see if they like your business. Even if you don’t raise money from the platform it’s a good marketing exercise because some relatively influential people are getting to hear your story.

Chuffed

If you’re into social enterprise or not for profits then you should look at Chuffed. There are lots of great causes although the sums raised are usually below $100k.

Final Note

Knowing how much equity to give away is always challenging and you have to do what you need to in the moment. If you need other people’s money to grow then giving away equity is the price you have to pay. With the benefit of hindsight, every entrepreneur is always a genius.

“Every entrepreneur always wishes that they owned more of their own company”

As entrepreneurs, you often try and raise money too early because you are naturally bullish and want to grow. Sometimes it’s better to hold off on raising more capital and demonstrate traction first. When you can demonstrate more traction you can have more of a premium in your valuation and then you don’t have to give away as much equity – don’t go broke in the meantime though. In a B2B business, like Jonathans, the types, quantum, and quality of the customer base demonstrate traction. It’s also demonstrated by the recurring revenue, having low churn, a high renewal rate and a revenue stream that’s constantly growing.

When you can demonstrate more traction you can have more of a premium in your valuation and then you don’t have to give away as much equity – don’t go broke in the meantime though. In a B2B business, like Jonathans, the types, quantum, and quality of the customer base demonstrate traction. It’s also demonstrated by the recurring revenue, having low churn, a high renewal rate and a revenue stream that’s constantly growing.

“The only two things a startup should worry about is hiring great people and not running out of cash”

Having what’s called “smart money” is more important than just having money. This is why venture capital is quite attractive to a lot of entrepreneurs because they add prestige, knowledge, street cred and advice that is highly sort after. When you have smart investors on board it’s a good idea to try and have some local ones so that you can be involved with them hands on. When you combine these investors with great advisors you have a really solid group of people around you that can be out talking about your startup.

Local Measure has an advisory board made up of a very senior Vice President of Google in North America, a Senior Product person at Salesforce in San Francisco, a Senior Executive of a tech company in Singapore and a well-known Chief Operating Officer of a large media company in Australia.

Bringing these types of people on to offer advice is really valuable, but try and make sure they have some skin in the game (equity) so that they can be rewarded when you succeed. Jonathan says that how you tell your story and how you demonstrate traction is what will help you to attract talent to your startup. People who are a little bit further on in their career are really keen to give back and might be attracted to help your startup.

I hope you got some ideas on some other ways to raise capital and feel free to head over to Local Measure if you want to know more about what Jonathan Barouch and his team do.
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Startups

15 Business Lessons From Napoleon’s Playbook

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Business Lessons and strategies from Napoleon Bonaparte for Entrepreneurs and CEO's
Image Credit | Joel Brown

Unleash your business potential by harnessing Napoleon’s strategic genius.

From dreaming big and thinking bold to moving fast and staying agile, these time-tested tactics are your blueprint for success.

Learn how creative leadership, detailed planning, and relentless execution can transform your business landscape. Boost morale, lead with clarity, and embrace hard work to conquer your industry.

Don’t just survive—thrive with the power of Napoleon’s lessons.

Here are 15 Powerful Lessons You Can Learn From Napoleon Bonaparte

 

1. Dream Big, Think Bold

Napoleon wasn’t just playing small; he believed that “Imagination rules the world.” In the business world, boldness and creativity are game-changers. Don’t just aim to fit in—push boundaries and set ambitious goals that make you stand out.

Think of Steve Jobs, who didn’t just want to make computers; he wanted to revolutionize entire industries. Your vision should be so grand it almost feels unreachable. When you dream big, you inspire those around you to believe in the impossible and work together to achieve extraordinary outcomes.

2. Move Fast, Stay Agile

Napoleon’s quick and secretive moves gave him an edge. In business, you gotta be nimble. Adapt quickly, move fast, and you’ll often find yourself ahead of the game, capturing opportunities your competitors miss.

Companies like Amazon and Tesla thrive because they constantly innovate and pivot when needed. Speed is your friend; it allows you to react to market changes and customer demands faster than the competition, ensuring you remain relevant and ahead of the curve.

3. Creative Leadership

Napoleon thrived on chaos and wasn’t afraid to switch things up. Unlike rigid leaders, he was flexible and adaptive. In business, embrace change and let chaos work for you. Being adaptable can turn unpredictable situations into opportunities.

Think of how Netflix transitioned from DVD rentals to a streaming giant. Flexibility and creativity in leadership allow you to navigate through turmoil and emerge stronger, transforming challenges into stepping stones.

 

4. Organize Like a Pro

Napoleon’s mind was like a supercomputer, processing vast amounts of info to make smart moves. Businesses should do the same—stay organized, use real-time data, and adapt strategies based on fresh insights to keep that competitive edge.

Utilize modern tools like CRM systems, analytics software, and AI to manage information efficiently. Staying organized and informed means you can make better decisions, foresee potential issues, and react promptly.

 

5. Keep It Simple

Napoleon knew the power of simplicity. Overcomplicating things can bog you down. In business, streamline processes and focus on what truly matters to hit your goals efficiently.

Apple’s product design philosophy under Jobs was about simplicity and user-friendliness.When you remove unnecessary complexity, you reduce errors, speed up processes, and make it easier for your team to focus on what’s important, driving efficiency and effectiveness.

 

6. Execute Relentlessly

Once Napoleon decided on a course of action, he went all in. In business, once you pick a direction, pursue it with full commitment. Execution is where success is truly made.

Look at how Elon Musk commits to his vision for SpaceX and Tesla. Relentless execution means overcoming obstacles, staying focused on your goals, and not getting distracted by setbacks. It’s the determination and persistence in execution that ultimately leads to triumph.

 

7. Play to Your Strengths

Napoleon only fought battles he knew he could win. In business, focus on your strengths and avoid head-to-head fights in areas where you’re weak. Know your advantages and leverage them.

Microsoft leverages its strength in software development and cloud services rather than trying to compete directly in hardware. Understanding and maximizing your strengths ensures you play a game you can win, using your unique capabilities to outshine competitors.

 

8. Plan in Detail

Napoleon planned for every possible scenario. Businesses should do the same—conduct thorough planning and prepare for various outcomes.

Detailed planning helps you stay ready for anything. Scenario planning and SWOT analysis are tools that can help you foresee different futures and prepare accordingly. When you’re prepared for multiple scenarios, you can adapt smoothly and continue to drive forward, no matter what challenges arise.

 

9. Seize Opportunities

Napoleon saw luck as the ability to capitalize on accidents. In business, be prepared and ready to grab unexpected opportunities. Agility is key.

Companies like Uber and Airbnb seized gaps in the market by being ready to pounce on opportunities when they arose. Always be on the lookout for opportunities, and when they come, don’t hesitate. Preparation and readiness to act quickly can turn unexpected moments into major breakthroughs.

 

10. Learn from the Past

Napoleon studied the greats who came before him. Entrepreneurs should always be learning from the successes and failures of others. History is full of lessons waiting to be applied.

Warren Buffett is famous for studying businesses and market histories. By learning from the past, you can avoid repeating mistakes, understand what works, and build on proven strategies. Continuous learning from history helps refine your strategies and improve decision-making.

 

11. Boost Morale

Napoleon knew how to keep his troops motivated. Business leaders should do the same—keep your team inspired and engaged. High morale leads to high productivity.

Companies like Google and Salesforce invest heavily in employee well-being and motivation. When your team feels valued and motivated, they are more productive, innovative, and loyal. High morale fosters a positive work environment where people are excited to contribute and excel.

 

12. Lead with Clarity

Napoleon believed in the power of a strong, decisive leader. In business, clear direction and strong leadership are crucial. Ensure everyone knows the plan and follows it.

Leaders like Jeff Bezos provide a clear vision and direction, ensuring their teams know what they’re working towards. Clear, decisive leadership aligns your team, fosters trust, and drives coordinated efforts towards achieving your business goals.

 

13. Reflect on Failures

Napoleon analyzed both his wins and losses. Businesses should review their successes and failures to keep improving. Learn from mistakes to avoid repeating them.

Ray Dalio of Bridgewater Associates emphasizes the importance of learning from failure in his book Principles. By conducting post-mortems, you can understand what went wrong, make necessary adjustments, and continuously refine your strategies to avoid future pitfalls and drive success.

 

14. Action-Oriented

Napoleon was all about turning thoughts into actions. In business, decisiveness and execution are vital. Don’t just plan—act on those plans with energy and determination.

Entrepreneurs like Richard Branson embody this principle by constantly moving from ideas to actions. Action orientation ensures that you don’t get stuck in analysis paralysis but instead drive forward, making things happen and turning visions into reality.

 

15. Embrace Hard Work

Napoleon lived and breathed work, saying, “Work is my element; I am born and built for work.”

In business, a strong work ethic and relentless dedication are key to success. Think of how Howard Schultz rebuilt Starbucks through sheer hard work and determination. Embracing hard work means being willing to put in the necessary effort, staying dedicated to your mission, and continuously pushing towards your goals, no matter the challenges.

 

By implementing these lessons from Napoleon, businesses can sharpen their strategies, strengthen leadership, and execute with precision, driving sustained success.

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Startups

How to Manage Your Startup’s Finances More Efficiently

No matter how groundbreaking your product or service, your startup could quickly be on shaky ground without proper financial management

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managing your startups finances

Running a triumphant startup requires juggling numerous responsibilities. From managing operations and coordinating with team members to developing innovative marketing strategies and nurturing relationships with clients, the to-do list seems endless. (more…)

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5 Strategic Power Moves to Successfully Build Your Empire

Transitioning from idea to empire is a journey of strategic planning, execution, and constant evolution

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how to build your empire

The journey from a fledgling idea to a thriving empire is both exhilarating and daunting. The Startup Launchpad is not just a process but also a strategic framework that enables visionary entrepreneurs to become market leaders. This framework comprises five power moves, each a critical steppingstone in building a successful business.

These moves—Ideation, Business Plan, Online Presence, Strategic Marketing, and Launch and Growth—are the blueprint for turning aspirations into achievements. (more…)

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How to Avoid Startup Clichés and Buzzwords When Pitching Investors

Using jargon can make you sound like you’re trying to fill space instead of providing meaningful data

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Entrepreneurs frequently seek startup funding through a variety of channels. Yet, none seem as challenging as successfully pitching to experienced investors. After all, investors are pressed for time and eager for opportunities. These characteristics make it challenging to motivate them, especially if you’re bombarding them with a pitch full of jargon. (more…)

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