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Funding

WHICH SOURCE OF FINANCING should you choose? TOP FUNDING SOURCES % of sturtups funded 57% Personal saving & credit 38% Friends & Family 2,61% Others 1,43% Banks 0,91% Angel investors 0,05% Venture Capital PERSONAL SAVINGS You have full control of your business. 48 000 $ You demonstrate your commitment to the business and make it more trustworthy. Avg. Amount invested Only for start-up phase. example : GitHub / 37 Signals FRIENDS AND FAMILY You keep full control of your business (just like with using only your personal savings). 23 000 $ You can raise more money than you would on your own. Not paying back the money can destroy personal relationships. Avg. Amount invested example : Of a kind / Tweetalicous VENTURE CAPITAL Very high investments: The average invest- ment is usually between $500,000 and $6 5,94 MM $ %24 million. Access to knowledgeable and experienced consultants who are willing to help guide your business. Avg. Amount invested High rates of return -they can be as high as 50% annually. You can lose control over your own company. example : Facebook / Twitter ANGEL INVESTOR High investments - between $25,000 and $1.5 million. 74 995 $ Usually fast due diligence. almost in every big city you Accessibility - can find many Angel Investors. Avg. Amount invested High rate of return – often 25 percent or more. You can lose control over your own example : Forrst / Postling company. CROWDFUNDING It hedges risk. 7000 $ Crazy ideas get funded. Your investors are your early adopters. it's free. You have a crowd of investors but they offer no additional value to your business but for Avg. crowdfunding campaign size money. It's hard to predict if your project will be example : Pebble watch funded. Sources: http://www.entrepreneurship.org/emed/pros-and-cons-of-venture-and-angel-investing.aspx / http://www.entrepreneur.com/article/230011 StartupWorks

Funding

shared by StartupWorksCo on Nov 28
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Which source of financing you should choose? Pros and cons of different sources of funding for startups

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Alicja Rudowska

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Business
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