Crash Course Business: Entrepreneurship

Speaker: Anna Akana

Introduction

• Launching a business can be costly; the speaker invested $10,000 in their apparel line, Ghost and Stars.
• Funding can be obtained through saving, finding investors, or both.
• Importance of being brave to share one's designs with the world.

Types of Funding

Three Fs: Friends, Family, and Fools

• Often the first funding source due to trust and belief in the entrepreneur.
• In 2014, they invested $60 billion in startups.
• Advantages: Keep company ownership and shared success.
• Disadvantages: Risk of failing and involving loved ones in financial loss.
• Tips for asking: Clear goals, showing commitment, transparent communication, and legal structuring.

Crowdfunding

• Platforms: Kickstarter, IndieGoGo, GoFundMe.
• Involves posting project details, funding goals, and offering perks.
• Advantages: Retain company ownership, gain early customer network.
• Challenges: Research needed, fulfillment of promises, and potential zero funding if goals aren't met.

Bank Loans

• Not the first stop due to lack of assets or stable revenue in new businesses.
• Building relationships with bank officers is beneficial.
• Requires a solid business plan with financial projections.
• Risks include collateral loss if unable to repay.

Investment-Based Financing

• Includes angel investors and venture capitalists.
• Angel investors: High net-worth individuals, investments under $100,000.
• Venture capitalists: Focus on startups, offer larger funds but require ownership shares.
• Accelerators/incubators can offer mentorship and networking.

Equity Crowdfunding

• Similar to traditional crowdfunding but investors receive ownership stakes.
• Suitable for communities with few venture capitalists.
• Raises less money on average, and involves ownership dilution.

Grants

• Offered by governments, companies, and foundations.
• Benefits: No repayment or ownership transfer.
• Drawbacks: Difficult to obtain, specific funding purposes, and strict guidelines.

Conclusion

• Finding the right funding is essential and should be guided by personal connections and business goals.
• Growth and whether it is beneficial will be discussed in the next session.

Other Information

• Crash Course is sponsored by Google.
• Opportunity to support Crash Course through Patreon.
• Related course on negotiation available in Crash Course Business: Soft Skills.