All articles by The Startup Station

Fundraising is a daunting challenge, even for the best finance professionals, and downright scary for startup founders with no finance experience. According to Fundable and Entrepreneur, 565,000 startups are launched every year and just under 3% receive angel and VC investments. Entrepreneur identifies three main reasons startup founders fail to secure funding that we further address in this article and the corresponding video.

There is a lot of confusion around what startup valuations are really based on. To start off, let’s understand what they ARE NOT based on: Numbers taken from the sky, or unjustified projections Wishful thinking Desired percent of equity that you “think” you should give away To drive the point home, you can’t just say: “I think I am going to generate $1M in Year 1, $5M in Year 2, $25M in Year 3, $50M in Year 4, and $100M in Year 5”, just because those numbers seem reasonable, and even if other startups have similar projections.

If you are a founder in the process of creating financial projections for your pre-revenue company for the first time, most likely you have two thoughts. Thought # 1: “This is hard”, and Thought # 2: “This is futile because, without any data, I can only guess what my sales would be!” Well, you are HALF right.

As a startup founder, you have to become familiar with basic accounting concepts. In this article and the corresponding video, we discuss how to categorize various cash expenses from your Income, or Profit & Loss, Statement properly.

All entrepreneurs are risk-takers. If you are uncomfortable with taking risks, entrepreneurship is most definitely not for you. But does that mean you should take every risk you can? In this article, we discuss how to evaluate which risks are worth taking.

For early-stage companies and founders, few questions get asked more in the startup world than, “When should I try to raise money?” Although it would be much easier if there was a simple answer to this question, each founder and their respective startups face different obstacles when traversing the path to the point of fundraising.

Investors are not running a charity. The reason why investors make investments is that they believe they will make a profit. For them, it is a business transaction, that is researched heavily and thoroughly thought through. This further means that investors want to know the business they are bankrolling really well and minimize their risk as much as possible. Thus, knocking randomly on their digital doors to ask for cash is not the best way to get funded fast. In fact, contacting investors only when your company needs capital will elongate the search needlessly.

Many startup founders wonder whether they can use the funding needs of a comparable company as a guide to see how much money their company should raise. It seems like a good idea, but it is NOT! While comparables are very important and help you determine the exit, or the terminal, value of your company, the information that they give you should NOT be used blindly. In this article and the corresponding video, we discuss the four reasons why you need to adjust the comparables data before it becomes relevant for your company.

Cryptocurrencies, or new investment vehicles of startups using blockchain technology, have gotten a lot of publicity recently, especially with the rise and fall of Bitcoin, the first cryptocurrency. Just in 2018, $21.5B was raised via ICOs, or Initial Coin Offerings. If you want to learn what an ICO is all about, you can start by reading this. In this article and the corresponding video, I would like to focus on the advantages and disadvantages of ICOs as investments, because sadly many investors still significantly underestimate ICO risks.

When I meet first-time entrepreneurs, almost every initial conversation eventually turns to “How and where do I look for angel investors”? This process is especially arduous for female founders. In 2018, Fortune magazine reported that only 2.2 percent of all venture capital funding in the U.S. went to companies founded solely by women, and another 10 percent went to companies with at least one female founder. So what do you do?