Categories:
Finding Funding Angels
Authored by: Monica  

In the spiritual and financial worlds, angels are a good thing indeed! Tech companies like ours almost always begin with a great idea. An idea that may be simple and yet profound in its ability to make an impact. An idea that gives the founders of a company some huge challenges to overcome. And perhaps one of the biggest challenges is funds. This is where angels can fly in to make a difference.

angel-153935_640

(Image Source – http://pixabay.com/en/angel-abstract-blue-glossy-halo-153935/)

 

Of course, angels are not the only ones who can deliver the much needed greenbacks as far as funding is concerned. Even as the Big Idea gets built into strong foundations and concepts, a company must look for the right kind of funds and financers. So what are the options that a young company can turn to? For sure, supportive (rich?!) friends and family members can be a lucrative source. Government grants, bank loans and venture capitalists are all tried and tested options. There are also options such as:

  • Seed funding,
  • Series funding,
  • Angel investors,
  • Debt funding and
  • Equity financing.

 

Seed funding, as the term implies is startup cash. More often than not, seed money is the kickstart that any tech company needs before it can earn the serious cash. Series funding denotes several rounds of funding, starting with Series A. It starts with funds flowing in to support the initial operations of a company. Each round or series of funds will differ on aspects such as amount of money, offer options, involvement of venture capitalists and so on.

 

 

(Image Source - http://pixabay.com/p-20619/?no_redirect)

(Image Source – http://pixabay.com/p-20619/?no_redirect)

 

 

Angel investors – well, they can get involved in almost any type of funding. You can have an angel investor giving you seed money. Or you can have an angel investor giving you Series B funding and so on. Typically, a benevolent financial angel is repaid with ownership equity or some other kind of stake in the company. Debt funding is the type of fund that will need to be repaid regardless of whether the company is making profits or not. Equity funding is obtained when the tech company sells off its stocks to raise money. Yes, seed funding can be a type of equity funding too.

 

There is also crowd funding, which has become a pretty popular thing to do. One of our examples is the famous Pebble watch which was such a popular crowd funded project. Then there is the very interestingly termed bootstrapping funding. Pulling yourself up by your bootstraps? This funding means exactly that – you put in your own money to propel your big idea off the ground. Mark Zuckerberg and Eduardo Saverin did just that and the result was Facebook. They also went on to get an angel in the form of Peter Thiel. Series funding has played a huge role in the development of Tesla Motors, best associated with Elon Musk. One of the biggest factors in the growth of Google was its equity funding in the year 1999.

Geefunding_crowdfunding

(Image Source – http://commons.wikimedia.org/wiki/File:Geefunding_crowdfunding.png)

 

 

Tech companies have to work hard for their money! In the ever fluid world of digital businesses, funds can be extremely difficult to come by. Your idea has to be mind blowing or solid enough to make for a credible entity for funds from different sources. It is perhaps only then that the angels will perch on your shoulder and gleefully guide you to success in the real world.

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