• Angel investment - is it right for you?
  
• Equity Crowdfunding - is it right for you?
  
• The 5 minimum requirements before you go out to raise

Angel investment

This method is usually the earliest equity investment made in startup companies. Typically, Angel Investors are wealthy individuals whom tend to band together within investor networks based on regional, industry or academic affiliation. 

Angel investors are commomly former entrepreneurs who have experienced success in their ventures and wish to continue working with startups in a particular industry (or geographical region) regardless of the fact that they have exited the very entrepreneurial ventures that made them wealthy.

Equity crowdfunding

Equity crowdfunding offers private company securities online to a group of people for investment, and is therefore part of the capital markets. Equity Crowdfunding is often subject to secuities and financial regulation due to the nature of the investment being into a commerical enterprise. Equity crowdfunding is also referred to as crowd-investing, investment crowdfunding, or crowd equity.

Equitycowdfunding is a mechanism that enables broad groups of investors to fund startup companies and small businesses in return for equity. Investors give money to a business and in return for ownership of a small peice of that business. If the business succeeds, then its value goes up, as wel as the value of a share in that business - the converse is also true. Coverage of equity crowdfunding indiscates that its potential is greatest with startup businesses that are seeking smaller investments to acheive establishment, while follow-on funding (required for subsequent growth) may come from other sources.

Minimum Requirements for Fundraising

Raising investment for a business means taking on investors. Whichever funding methods you choose, raising investment is often a full-time, dedicated process for a founder, which is likely to takes months of planning and pitching before the investment is raised. While the process is rarely quick or simple, it is one of the most important things a CEO, CFO or founder must do.

Businesses depend on different skill sets and expertise to grow. No entrepreneur has every single skill needed to cover every aspect of launching and growing a successful business alone thus many investors prefer to invest in a team with a broad skill set and support system.

There are many qualittive and quantitative techniques for valuing companies and we believe it is more of an art than a sicence. The price that you charge for the equity given away determines the company valuation at that point. The best starting point for determining valuation is to figure out how much money you need to reach your next growth milestones and how much percentage of equity you are willing to give away at this stage of the business. 

Before you raise capital, it’s important that you have a strong idea of what you’re going to do with that money and where you want your business to go over the coming year

Jessica Dick - Co-founder, Five Years Time