Category: Strategy

Crowdfunding could grant greater access to capital

crowdfundingescenseThe Securities Exchange Commission, the body that enforces federal securities laws and regulates the securities industry, the nation’s stock and options exchanges, among other functions have agreed to propose a rule that would allow the average-Joe to invest in startups.  The “Regulation Crowdfunding” proposal would allow a company to receive money directly from nonaccredited investors in exchange for equity-ownership of the company.  Without this law, smaller companies had limited options for raising money from investors (typically accredited investors, commercial banks and VCs).  Now they can raise money similar to that as if they were a public company.

There are conditions to crowdfunding:

1)  Companies can only raise up to $1 million per year from crowdfunding

2)  Investors can only invest upto 5% of their annual income.

3)  Investors must invest through crowdfunding portals like CircleUp.

Read the rest of the article on TechCrunch.

Branding

Would you buy tea from Nike?  Or shoes by McDonald’s?

Sure one might think Nike doesn’t have the facilities, operational know-how, etc. to make tea.  With the vast majority of its manufacturing overseas, Nike is more of a design and marketing firm than a shoe manufacturer, according to a Harvard Business Review article. 

Getting back on point, Nike can’t sell tea because of branding.

What is branding?

Branding is the personality of the company.  This “personality” helps determine what the company sells (it can be more than one or even a few things), where it sells them, how much they charge, how their ads look, etc.  In a previous post, I mentioned how Redbull had an event called the Flugtag and that it’d be difficult for Lipton to hold a similar event.  This is because an event where people dress up and launch a home-made contraption off of a pier does not fit Lipton’s brand image.

One brand that has crossed more product categories and demographics more than any other is Hello Kitty.  Beyond clothes and accessories, there are Hello Kitty branded motor scooters, toasters, airlines, and adult novelty toys (although this might not be an official Sanrio licensed product).  Yet another addition to the roster is Hello Kitty Beer.  Is there nothing this kitty can’t brand?!

RedBull Flugtag, marketing, and branding

Your Startup Guru case study - Redbull Flugtag

The RedBull Flugtag is an entertaining spectacle and a genius public relations event all designed with its branding in mind.

Last weekend I attended the RedBull Flugtag in Long Beach.  It was an entertaining spectacle with lots of energy and a massive audience.  The highlight of the event?  To watch little more than shoddily made objects fall into the harbor.

Would such an audience turnout for out for an event held by, say Lipton Tea?  Imagine the Lipton Flugtag.  Do you think hundreds of people would sign up to spend many hours to build something that will last for seconds in front of tens of thousands of people?  If Lipton sponsored such an event, do you think tens of thousands of people will even show up?

This is because the event (or more accurately) public relations event, is dependent on the brand image of the brand (i.e. RedBull) is maintaining (or pursuing if the brand is trying to reposition itself).  People associate RedBull with action, irreverence, fun.  Lipton?  Not quite as much.  However, Lipton has market awareness strengths they can flex that RedBull is ill-fitted for.

How you advertise, where you advertise, the contents of your advertisement is highly contingent on your brand image.

Pop quiz:  What is the difference between marketing and public relations?

“Unconventional” financing

Your Startup Guru - Unconventional financing

Seed Financing

Often the most difficult hurdle to a start-up is the first one: seed financing (I.e. Startup capital). Entrepreneurs can mistakenly believe that SBA and commercial bank loans are the only sources of financing outside of personal savings. As posted in a previous blog, only about 13% of Inc. Magazines 100 Most Admired Companies of 2013 took on commercial bank loans. An increasingly viable option is microlending/peer-to-peer lending. These are less formal lending systems that individual lenders offer money to borrowers at often much lower interest rates than that of commercial banks.

This interesting Harvard Business Review article titled The End of Banks as We Know Them? discusses such unconventional lending.

Contact us today for your fundraising needs!

How much startup capital is needed and where it comes from

How much startup capital is needed and where it comes from

$50,000? $100,000? Credit Unions? Commercial banks?

An enlightening survey of entrepreneurs shows how much startup capital was needed and where it came from. Well over half the companies started with less than $10k from personal savings, and only 13% received startup capital from banks.

Contact us to calculate how much startup capital you need for your business as well as help with business plans, pitch decks, and fundraising.

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