I just read an article on TechCrunch about how the independent film “Artemis Eternal” has already raised $40k of the $100k total amount that they are seeking for the film project via “crowd-funding.” In other words, they are allowing the public to contribute as little as $1 to fund their film development and “cut out the middle man.”

This announcement is very interesting to me because we see so many independent films and we normally just turn them away (unless there is a special circumstance). There are very few companies that we turn away at FundingUniverse, but as of today, we don’t have any confidence helping films to get funding — they are just too high risk for the overwhelming majority of investors. To be honest, it is just a world that we don’t know very well and so we don’t feel comfortable helping film-makers.

Because of the demand and the pain in the market, we’ve thought a lot about dedicating a portion of our site to helping film-makers through the fundraising process, however, maybe we should just refer them to Artemis and learn how to raise “crowd-funding.” For those of you that have raised money for films, where did you go? We’d love to learn more about this industry.

We’re very pleased to announce that FundingUniverse has recently been named the #2 Start-up to Watch by the Utah Valley BusinessQ Magazine.  We were very honored by the award and are humbled to join such a prestigious group of companies on the UV50 list.

Also, we’re also humbled to have been selected to vSpring Capital’s v100 list — the top 100 venture entrepreneurs in the state of Utah.  Thanks to you, our customers for the confidence.  And congrats to the entire FundingUniverse team!

As a startup, it’s a challenge to manage cash — don’t worry, we know.  But one of the things that we’ve learned (through both personal experience and with helping other entrepreneurs) is that there of creative ways to bootstrap/finance your company.  Let me provide a few examples:

1. Leasing computers.  Instead of going to the nearest electronic store and purchasing a new computer, go to one of the large manufactures (Dell, HP, etc.) and see if you can obtain a credit line to finance the computers you need.  We’ve seen that most companies can usually obtain a $25k line of credit pretty quickly.
2. Credit Cards:  If you do your homework, there are quite a few credit cards out there that will allow a company obtain more than the standard $3-$5k limit.
3. Other credit lines:  one of the examples that I like to use is Google.  For those of you that use Google adwords, do what you can to get a hold of an account manager to help you obtain a credit line on your ads.  Instead of maxing out your credit cards every other day paying for your ads, they will often provide a credit line that helps you to manage your cash flow.

Those are just a few quick examples.  Remember, cash is king.  Do all that you can to keep cash in your hands and allow others to finance your business for you!

Over the past few months, we’ve spent a lot of time learning about the various types of financing that is available to businesses.  In fact, we are working on a significant partnership that will allow us to help a lot more entrepreneurs obtain unsecured lines of credit.  For those of you that are interested, here are a few tips that you’ll need before you approach any bank/lender:

1. 680+ Credit Score (if you don’t quite have that high of score, that’s ok too… we’ll just start off helping you repair your credit)
2. 2+ years in business
3. Make sure that all of your personal and business credit is accurate with the credit bureaus
4. Obtain a DUNS number for your business
5. Obtain credit maturity (length of time) and credit diversity (credit lines with multiple types of credit — home, auto, revolving, etc.)

I could probably create a list with about 30-40 items, but those 5 will get you started.  The two “biggies” are the first two — if you have a great credit score and you’ve been in business for at least 2 years, let us know.  We are very confident that we’d be able to help you obtain an unsecured line of credit somewhere between $10k-$350k.

Especially as your team grows, there is often a disconnect between the person or people raising money and the rest of those in the company.  As you are assessing your needs, you should gather everyone up at least once to get down to the nitty gritty details of what is needed.  Find out where your team needs help, both with more people, technology, or supplies.  Make sure the expectations are realistic on both the management and employee end of the deal.  Sometimes the little things that make a company are forgotten in the midst of trying to raise money for a big hire or nationwide marketing campaign.  New computers, a human resource manager, or IT manager can often be just as important in the long term health of your company.  To be cliche, don’t forget the little guy.

After some great feedback and suggestions from both our entrepreneurs & investors, we have released a new service that will allow our entrepreneur members to contact investor network! This new feature will allow and encourage open communication between both the investors and entrepreneurs. So far, we’ve received great feedback from both groups.

Here is a quick screen shot of the search criteria (image is reduced in size):

After searching, it will pull up the profiles of each of the investors that meet your search criteria. In this case, you’ll see that there were 10 investors in my area that met the search criteria that I input.

Anyway… check it out and let us know what you think!

I spent some time watching/listening to a panel of Silicon Valley Angel investors moderated by Guy Kawasaki.  The panel featured three rock-star bay area angels including:

1.  Andy Bechtolsheim:  Co-Founder and Chief Architect and Sr. VP, Network Systems, Sun Microsystems — Google’s first angel investor
2. Ron Conway:  Independent Angel Investor, former Founder & Managing Partner of Angel Investors LP — probably one of the most active angels I’ve heard of (he has invested in over 120 companies over the past couple years)
3. Dr. Ian Sobieski:  Managing Director, Band of Angels Fund

Here are a few highlights and tips from the video:

• Ron and Andy told the “Google Story” — how & when they first invested in Google.
• Non-intended “plug” for our Speedpitching events from each of the investors:  “within 5 minutes, I can know if I’m interested.”
• Why is an angel preferred to a VC?
• What is the primary motivation of angel investors?  Obviously each angel wants to make money, but beyond that, the angel likes to interact and work with entrepreneurs.  Entrepreneurs are the future.  They also want to be able to give back and be a part of something where they can lend help and expertise.
• Guy does a good job moderating and getting to the meat of the conversation:  how do you find deals?  What should the entrepreneur’s pitch look like?  (Keep it short:  1-4 page executive summary, no more than 20 page PPT, etc.)
• “Planning is essential.  Plans are useless.”  The process of writing a business plan is important for the internal success of the company… but the document that you submit to investors should be a very shortened version focused on management, market/financial opportunity, sustainable competitive advantages, and traction.

Highly recommended.  If you are an entrepreneur trying to raise investment capital, check it out!

I just got off the phone with another one of the entrepreneurs that has successfully raised investment capital through FundingUniverse and, let me tell you, there is nothing better!  It’s so much fun to hear their unique story and hear about their learning experience.

With this company in particular, they participated in one of our SpeedPitching events last summer.  They met a significant group of investors that were interested in their plan, and were even invited to pitch in front of one of the angel groups.  After their pitch (to the angel group), they realized that they were not ready to move forward with an investor and went back to their preparations.  After about 6 months of working on their company, financial projections, and business plan… they are now back on the “fundraising trail.”  They have already raised a significant chunk of their total amount and will be pitching again in front of the same angel group within a month (to finish the round).

Anyway… if you want to make my day, give me a call at FundingUniverse headquarters to tell me your success story!

I was at an event a few weeks ago and one of the entrepreneurs in attendance came bragging, “My business plan is nearly perfect; I have nearly 100 pages on my business plan.”

100 pages in a business plan!?

Wow.  Unless you have created the most technical advancement in aerospace of life sciences, I’m going to tell you to throw that 100 page document in the trash!  Let’s be honest, no investor is going to read a 100 page business plan.  In fact, they probably won’t read it if it is over 10 pages.

If you are going through the rigorous process of creating a business plan, here are a few suggestions (that have been validated by many investors):

1. Keep it short.  Investors see hundreds of business plans and, no matter how great your plan is, they will not spend an hour trying to figure out what you do.  While there are exceptions to this rule, I’d recommend a 3-8 page business plan/executive summary.
2. Don’t spend too much time on the product.  Remember that you are selling your company, not your product.
3. Thing big.  Investors are looking for the next Google.  While $1-2M in revenue might be a large company to you, it’s probably not something that most investors are going to get excited about.
4. Think from an investor’s perspective.  Do the economics make sense?  Make sure to evaluate the risk vs. reward balance.
5. Don’t get too fancy.  Make sure that it is clean and presentable, but don’t try and make it too trendy.
6. Use images and graphs — especially to explain difficult concepts.  They are usually easier to read and understand, which can only help.

I just received that Google Alert about FundingUniverse being featured in an article in today’s Wall Street Journal.  The reporter had called me about 3-4 weeks ago, but you never know if the article will ever make it to print.

It’s exciting to see that they were able to talk to a few of the entrepreneurs that have been successful.  If you haven’t seen it, go check it out!