How to Raise Money For Your Startup

Raising money is simple but not easy. This guide illustrates one way how to raise money for a startup, especially for first-time entrepreneurs. We have seen quite a few entrepreneurs go from nothing to a funded company. This infographic is a generalization of their experience. Let us know if you have any questions about it in the comments.

Over the last three years I have seen over a thousand startups in their early stages. I witnessed many of them go from an idea to funding within several months. I have also seen some of them fundraising for years and not getting anywhere.

Few More Tips How To Raise Money

When it comes to funding, there is one thing that can increase your chance of getting funded astronomically – traction. Yet, founders often struggle to get traction and hope that investor money will help them get it. This problem can be solved if you start lean, test your product and and gather meaningful feedback from your customers.

Use that feedback to modify your product. After you get traction, you are certain to get interest from investors. How much traction? Compare yourself to your competitors at the moment they got funding and use that as a benchmark.

Preventing people from raising money successfully, the other myth is that you can raise money before you build anything. Even if you are not an engineer, you can build a prototype of your product. You can do it in WordPress, another content management system (CMS), you can learn to code the basics. If you do not go out of your way to build your own product, why should other people risk in joining you?

Finally, when you are going to raise money, have the investors feel good about what you are going to spend their money on – not marketing, not development, not business development, but scaling.

Sources:

• businessinsider.com
• secondmarket.com (On the size of angel rounds.)
• quora.com (On the best prototyping strategies.)
• Demos and pitches of 600 startup founders we have seen at Funders and Founders.

Education is broken — but this entrepreneur has a stunningly simple idea to fix it

A former hedge fund analyst pointed out a crippling flaw in the US education system during alive TED Talk in New York City in November.

Salman Khan, also a founder of the free education resource Khan Academy, says we force students to move ahead when they aren't ready.

But he has a solution.

"We shouldn't drag everyone around at the same pace," Khan told the audience. Instead, he says, we should take inspiration from martial arts teaching.

Suppose a student gets a 75% on a test, which is a passing grade. Khan says this means the student didn't learn 25% of the material, yet they're expected to move on to the next lesson with the rest of the class.

The problem with this, he says, is the next block of material builds on what the student was supposed to learn in the last lesson, and it's usually more difficult to pick up. So a student learns only 75% of the material, we can't expect that student to master the next section.

You can see how this effect could quickly snowball as a student works their way up through more advanced classes. If students don't master all of algebra, for example, they'll have significant knowledge gaps when trying learn calculus.

Khan says we assume they are bad at math, or born without the "math gene," and so they'll give up on the class.

In reality, they're not bad at math — they just didn't master the foundation material, he said.

Which is why Khan argues we shouldn't drag everyone through school at the same pace. The education system should work the same way as martial arts or mastering a musical instrument, he says: Practice your white belt skills until they're perfect, then move up to the yellow belt; practice the beginner piece until you nail it, then move on to the more advanced song; don't move onto calculus if you haven't mastered algebra and trigonometry.

A lot of research out there backs up Khan's idea. Students that don't move onto the next lesson until they master the first often perform better later in their education career than peers who are arbitrarily shoved along from grade to grade.

If we personalize the education experience for students instead of requiring them to move as a herd, then anyone "could become a physicist, or a cancer researcher, or a rocket scientist," Khan said.

Provided, of course, that they put in the work required to master all of the steps.