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B²Hub Accelerator Program
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In the Capital Quadrant, it becomes imperative to find the necessary funding to meet initial costs while ensuring a successful launch. The startup capital process remains challenging, much in comparison to the commitment of developing the idea and building a solid foundation. The associated pillars enable the fuel that typically feeds every business's engine, both in early-stage and growth-driven businesses. Entrepreneurs perceive it to be painful to mandate the process, find financing collectively with beneficial terms. Throughout the process, many startups are consistently faced with resistance appropriately to the risk attached to funding.
The pillars facilitate versatility when obtaining funding based on diligence and creativity from private and public funding. With the help of the B²Hub Program, entrepreneurs "can" develop the expected strategy, business plan, and relevant to evaluating the feasibility analysis from the Accelerator Program. Much of the process for raising essential funding constitutes the plan of action when developing a marketing strategy, designing, and producing the end product/service. Raising the necessary funding begins with a vision, values, goals, and a business model that reflects a value proposition and market definition that enables both equity and debt financing.
Typically an Angel Investor will invest in a small venture requiring an ownership stake of 25-60 percent. Although the return is high, it's much less risky compared to debt financing. The benefit of working with an Angel Investor - if the business fails and unable to recover, the debt does not require payment. The position of the investor is a long-term vision with a personal opportunity.
There are different Angel Investors such as family and friends, known wealthy individuals, groups, and crowdfunding.
Family and friends
The most obvious source of funding for startups, in many cases, is family and friends as the only alternative available. With the high rate of failure and impact on relationships, it's critical to ensure transparency regarding the risk, value, and possibilities while discussing risk and loss.
Another excellent source includes successful business people, doctors, lawyers, and others with a high net worth and is willing to invest in return for equity. Frequently this is arranged by word-of-mouth through family connections, business associates, or associations through B²Hub such as local individual investors.
Private investors associated with investment groups or clubs are also known as SeedInvest, Golden Seeds LLC, an Angel Investment Network, as there are approximately 200 U.S.
When deciding to employ private equity from a venture capitalist (VC), remember their focus is on receiving a massive investment return. The consideration of a startup requires understanding high-risk collectively with aggressive growth potential to achieve a high return. For the most part, VCs make money on the interest relevant to the amount of capital and may include management fees. Typically you will find an expected return of 20% to 40% applicable to the investment life.
The backbone to achieving a VC investment includes convincing them of the dedication to achieving a particular result and being passionate about managing the business goals. Of course, most want a clear picture of the size of the market, opportunity, competition, and the ability to provide critical metrics (KPI's) associated with financials. B²Hub team will guide you in explaining who you are, what you are selling, and who will buy. Knowing your numbers runs parallel when confirming your passion and enthusiasm to overcome market shortfalls. Much of the development is available in our pitch course.
Lenders / bankers
A partnership with a bank can be essential when collaborating on a startup venture. The assistance from your bank may guide you to start a business account, assist in financial investments, and become instrumental in the process of a commercial loan or plans of investing. Bankers take on a vital role as advisors to the startup or existing business when seeking financing. B²Hub will assist in providing direction in building personal or business credit. Mentors offer to advise on qualifying and the requirements to enter a financial process.
We have serval dedicated banking partners that will schedule the necessary time with both the mentor and participant to answer questions and provide essential direction to enable financial success. We are happy to invite the possibility of commercial lending and Small Business Administration (SBA) into the conversation to reach an optimal package that harmonizes with the business requirements.
The mentor will typically present various options to achieve best-fitted loans utilizing an array of lenders, investors, and available grants. In the process, evaluate loans based on terms, fees, and interest rates in providing the best choice while introducing and assisting in building a good partnership. Members of our board may help determine the amount of credit required and create long-term financing strategies to support speculated growth plans.
For a few startups, there may be in place an opportunity for a grant offering that are non-repayable funds provided by grant-makers such as the government, trust, nonprofit entity, and offered by both private and public. The awarded grant compares to receiving a scholarship when establishing fair use of the funds and deserving of the opportunity. A few of the offerings apply to poor demographics, veterans returning to civilian life, and often relevant green tech startups.
B²Hub often reviews CARES Act Small Business Grants, National Science Foundation, U.S. Department of Commerce, U.S. Department of Defense, U.S. Department of Education, U.S. Department of Energy, and many more. We also evaluate funding structures such as competitive funding, formula funding, continuation funding, and pass-through funding.
There are startup grants focused on research and development and support by the Small Business Innovation Research (SBIR) and overseen by the SBA Office of Technology focused on innovative technology. The Small Business Technology Transfer (STTR) enables small businesses to collaborate with nonprofit research institutions or Federal R&D. Meanwhile, the National Association for the Self-Employed (NASE) provides funding to encourage companies to become more successful; however, requiring membership.