Where can I find money?

Young entrepreneurs are defined by their fresh, exciting ideas and passionate drive to succeed. Most, however, lack money and the experience and connections to turn their concepts into viable businesses. So how do young startups land funding? The answer seems to be: any which way they can.

Kauffmann has published a series of ebooks featuring practical advice from healthcare entrepreneurs. The one posted bellow includes insights on early-stage fundraising based on the pitfalls, options and the feedback of experienced entrepreneurs in the field.

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Digital tools for early-stage startups

The right tools can make a huge difference to your ability to run your startup and life. There used to be a time that great software cost more than most entrepreneurs could afford. No more. A highly competitive and innovative market has led to many companies using “freemium” strategies to recruit customers, resulting in a proliferation of fantastic free tools.

This post contains 10 of the best that we have come across but there are many other useful tools out there. Steve Blank, godfather of the lean start-up movement, has a great list of other resources that we drew from in putting together this post: Startup Tools. Are there any that you have found invaluable to your company? Please share them in the comments!

Lean LaunchLab: An easy way for any team to go lean.

Validation Board: Test your startup idea without wasting time or money

Validately: An easy way to turn designs or wireframes into a clickable prototype.

Strategyzer: Your toolbox to build better Business Models.

Lean Stack Canvas: The faster, more effective way to communicate your business model with internal and external stakeholders.

Unassumer: A simple web-based software that helps you learn quickly what your customers really want, so you can focus on delivering the best products and services.

Survey.io: A great tool for testing product/market fit through a customer development survey.

Unbounce: It lets you create simple landing page design and do A/B split testing. It takes the pain out of creating landing pages (no HTML knowledge needed) and enables you to quickly test the market for your product idea.

Usertesting: Not a replacement for face to face usability tests but a good way of pinpointing any usability issues at an early stage.

Balsamiq Mockups: A great tool for creating interactive wireframes. It helps them to visualize their product ideas without the need for lots of documentation.

 

How much money does your startup cost?

How do you measure the value of a company? Especially, your company, the one you started just a few weeks ago. How do you determine its value? This is the question that will resonate in your brain over and over again when looking for funds for your startup. The following infographic will help you address the valuation of your company from its early stages:

Post 22 -how-startup-valuation-works-infographic

Several factors influence how much money can you ask an investor if you are negotiating a share of the company:

Traction: The most important aspect to show to an investor. The higher the number of users of the platform, more money you can ask.

Reputation: Entrepreneurs with prior exits in general also tend to get higher valuations.

Revenues: Are more important for the business-to-business startups than consumer startups. Revenues make the company easier to value.

Distribution Channel: Even though your product might be in very early stages, you might already have a distribution channel for it.

Hotness of industry. Investors travel in packs. If something is hot, they may pay a premium

If you want to delve deeper on additional tricks to valuate your startup at different stages read the article here for useful tips.

Survival of the fittest

The goal of a startup is to find the right thing to build as quickly as possible. However, the vast majority of startups fail, that’s a fact. As a new research by Harvard Business School shows 75% of all start-ups don’t succeed. According to the researcher Shikhar Ghosh, startups fail not because the product is bad but because the market it is not adequate, it does not exist or it is insufficient, customers don’t buy therefore less revenue than expenses. The Startup Genome Project has also analyzed data from 3.200 companies and came up with some answers summarized in the following infographic:

Why Startups Fail

Healthcare startups are among the ones that fail most. According to a study by University of Tennessee, 56% of startups in education and health still operate four years after launching.

The cost of startup failure in med tech is high: It throws away $10 to $200 million dollars, the time of 20 to 120 people, between 3 to 20 years of work and 3% to 25% of your life!

Recently, a couple of approaches have emerged that can make the process of starting a company less risky. The first one involves identifying unsolved problems because a well-characterized need is the DNA of a good innovation. This is what biodesign process is about, a needs-based invention process for medical device innovation aligned with an attractive market opportunity so that is sustainable. Developed by Stanford University in 2001, it has already launched 26 companies, raising over $200 million, creating over 500 new jobs and treating more than 150.000 patients.

The second approach that could reduce the failure rate of new ventures and help launch a new, more entrepreneurial economy, is a methodology called the “Lean Startup”. According to conventional wisdom, the first thing every founder must do is create a business plan, a static document that describes the size of an opportunity, the problem to be solved, and the solution that the new venture will provide. Typically it includes a five-year forecast for income, profits, and cash flow. Instead of executing business plans, operating in stealth mode, and releasing fully functional prototypes, young ventures based on the Lean Startup test hypotheses, gather early and frequent customer feedback, and show “minimum viable products” to prospects. This new methodology states that treating new ventures as established firms is a mistake.

d·HEALTH Barcelona has incorporated both approaches, biodesign and lean start-up, to its training process. Fellows will get immersed for eight weeks in a clinical setting, observe everything that happens and detect what does not happen, interact with professionals and with patients while working in a multidisciplinary team and learning about science, technology, business and design with internationally renowned experts and entrepreneurs. They will acquire the skills to select the best observed needs based on clinical impact, stakeholders, the treatment options and market’s characteristics to later build prototypes, present them in front of a panel of investors and get the funding to make them real.

For further reading check it out: