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Nairaland Forum / Nairaland / General / Business / How Do Startups Raise These Huge Funds ? (895 Views)
How Much Did African Startups Raise In 2021? / Making Huge Funds Online. / Top Tech Startups In Nigeria (2) (3) (4)
How Do Startups Raise These Huge Funds ? by Nobody: 8:59pm On Jul 11, 2021 |
How can I raise investor funds for a startup ? I read how startups raise huge funds from investors - where are these investors found ? I'll like to pitch one or two ideas to them. Any platform or body or anything ? |
Re: How Do Startups Raise These Huge Funds ? by Plomo: 9:06pm On Jul 11, 2021 |
There are ways… A solid, profitable idea is one of them. 1 Like |
Re: How Do Startups Raise These Huge Funds ? by Ynix(m): 9:23pm On Jul 11, 2021 |
kiako:first create an MVP, second register an LLC In Nigeria, third register an LLC or C Corporation in the US, third gain tractions of revenue then apply for international acceleration for your startup 2 Likes |
Re: How Do Startups Raise These Huge Funds ? by Plomo: 9:24pm On Jul 11, 2021 |
Ynix: Not necessarily. Remember there are pre-seed funding with which to research and build your mvp. 1 Like |
Re: How Do Startups Raise These Huge Funds ? by OmoOgunOriginal(f): 9:25pm On Jul 11, 2021 |
Ynix: Please what does MVP mean? 1 Like |
Re: How Do Startups Raise These Huge Funds ? by Plomo: 9:27pm On Jul 11, 2021 |
OmoOgunOriginal: Minimum viable product 1 Like |
Re: How Do Startups Raise These Huge Funds ? by Nobody: 11:10pm On Jul 11, 2021 |
Plomo: Which ways ? Like a platform or anything cos we gone past the idea stage..... |
Re: How Do Startups Raise These Huge Funds ? by Nobody: 11:14pm On Jul 11, 2021 |
Plomo: Please break down the processes involved as regards my topic .... |
Re: How Do Startups Raise These Huge Funds ? by Plomo: 11:18pm On Jul 11, 2021 |
kiako: I really can’t break it down cos it’s a lot. There are a lot of requirements. You can check out Ycombinator and see how tedious it can get. |
Re: How Do Startups Raise These Huge Funds ? by Nobody: 11:21pm On Jul 11, 2021 |
Plomo:Olright |
Re: How Do Startups Raise These Huge Funds ? by Ynix(m): 8:46am On Jul 12, 2021 |
OmoOgunOriginal:minimum viable product |
Re: How Do Startups Raise These Huge Funds ? by Ynix(m): 8:51am On Jul 12, 2021 |
Plomo:This topic to be broken down to pieces is a full stack course ranging from 500k and above oh. Why don't we like 3 to 10 guys team up on a project just like how Jack Ma and Jeff Bezos did for their startups in the 1990s. We float a Nigerian based coy,register a US based Corporation that has the value of $10 Million we can sell out like 10% and use it to fund our idea If anyone is interested chat me up 08089456258 |
Re: How Do Startups Raise These Huge Funds ? by SavageResponse(m): 12:05pm On Jul 12, 2021 |
Ynix: If you ever decide to team up with people to raise funds for a project make sure you do so with people who you know well especially with regards to ethics and their temperament when handling other people's money. It is also of utmost importance to be sure that each team member is bringing something of value (Eg special skills, knowledge or experience) to the table and will not just be a deadwood who contributes nothing but wants to just share money! |
Re: How Do Startups Raise These Huge Funds ? by OmoOgunOriginal(f): 3:36pm On Jul 12, 2021 |
Ynix:Thank you very much |
Re: How Do Startups Raise These Huge Funds ? by Ynix(m): 4:35pm On Jul 12, 2021 |
SavageResponse: You are very right on this, some people are acidic and some lack the capacity and patience to follow things through |
Re: How Do Startups Raise These Huge Funds ? by Nobody: 7:25pm On Jul 12, 2021 |
Ynix: I'd like to know, selling of shares of 10%, doesn't it translate to raising only 10% needed in the whole running of the business ? Or how does this shares thing capture its stance in capital proportion ? Lets say a business needs 100K for a year running. And 10% share is sold, can it generate more than 10K seeing that that is 10% of the total sum ? Secondly, why do we have to register a US corporation ? I believe to have a US presence; is it ? Lastly : being valued at $10M, how is that valuation done as in what does it entail ? Does one just say his business is valued at $10M or what are the modalities that bring up to that figure owing to the business. ? |
Re: How Do Startups Raise These Huge Funds ? by Ynix(m): 7:37pm On Jul 12, 2021 |
kiako: The concept of shares and selling of stake in a business is unique for Limited Liability Companies either private or public. Just like how the CBN print out money, the money for LLCs and PLC Comes from selling voting shares or ordinary shares of the company through private or public offering. Usually in Nigeria the average total share offer when registering is at 1 Million shares which is staked at 1Naira to 1 share so a person who owns 200,000 shares of a company owns the value of 200,000 Naira out of 1 Million naira of the company which also determines the dividends he or she gets when profits are made. For the US part, foreigners who are not based in the US are allowed to register either and LLC or C Corporation which allows one to do business in the USA even if you are not physically present most especially for technology companies. When registering a C Corporation you the average amount of shares awarded to owners is $10 Million of which it can be more than that. Owners have the privilege of selling out shares for raising funds for funding the business. The essence of fund raising through equity is not actually for just spending but for growing the value of the company through the Viable Products pushed out. So you don't look at it from the angle of spending but Investment and Returns of Investment (ROI) 1 Like |
Re: How Do Startups Raise These Huge Funds ? by Nobody: 8:28pm On Jul 12, 2021 |
Ynix: In other words, [taking the stats as written ] if 200, 000 shares are sold and what's needed for the business to get ROI is lesser (say 120K), it still means the shareholder(s) only acquired 20% stake ?? |
Re: How Do Startups Raise These Huge Funds ? by Plomo: 9:26pm On Jul 12, 2021 |
kiako: If someone offers to buy a 10% stake of your company at $100,000, then they’re valuing your company at $1,000,000. From that, I think you can do the math for say 25% stake for $120,000,000. There’s no general valuation of a company at initial startup. Traction, investments and revenues will determine your net worth. On the other hand, you start talking about shares of a private company when it successfully completes its IPO. It is no longer an LLC or Limited company but you start hearing PLC. It is now traded on the stock market. This is also the time most founders officially become billionaires…that’s after a very successful IPO sha. 1 Like |
Re: How Do Startups Raise These Huge Funds ? by Ynix(m): 12:59am On Jul 13, 2021 |
kiako:Yes but usually you don't undervalue your company based on your project plan though you don't also over value it beyond normal. Let's say you are going into the real estate market and you want to raise equity. Let's assume your target is to build 1000 duplexes of initial value of like $50,000 in 3 years, and that means that the value of the total products being is at $50,000,000 and let's assume you that the value of the properties will triple in value in 6 years that means the value of the product will be $150 Million by then. Now let's assume that all you need to kickstart the whole project is just $15,000 per duplex you can project an additional $5000 making $20,000 and ask for people to buy into your company so they can how some shares of it. With the money raise you build your houses sell some and make profit then share some to your shareholders will the company keep growing in value through Production, Marketing, Sales and Merchandising. As you grow organically or in-organically the value of your company may jump up to an excited state as you keep churning in revenue growing your workforce until your company becomes a shark 1 Like |
Re: How Do Startups Raise These Huge Funds ? by Plomo: 7:31am On Jul 13, 2021 |
Ynix: But most times, the valuation you put on your company is not what investors end up working with. Their will be lots of back and forth negotiations. You should always assume the investors have more experience than you, know the market and economy better and do their due diligence. So you may not get the funding you’re looking for at one go. That’s why you now start hearing of Series A, B, C. You didn’t factor in the fact that a business may never even successfully raise funds via any avenue. He may have sweet numbers, a juicy plan etc but the business does not just fit the venture model. A private company may also issue stocks or trade shares and have share holders but their shares don’t trade publicly on exchanges. These shares are less liquid (does not favor the impatient investor) and their valuations are difficult, very difficult to determine. |
Re: How Do Startups Raise These Huge Funds ? by Ynix(m): 8:17am On Jul 13, 2021 |
Plomo: True, that is why we have pre-seed and seed funding coming first before the route of the different series of funding. That is why the idea of crowdfunding and crowdvesting is popular now as alternative before any Venture Capitalist buys into the business. Nevertheless instead of overthinking things the best option is to start and jump into the ocean. The sad part of it is that most times we all function as angel investors and venture capitalist only that we want quick gains instead of looking at joining a visionary project that will take up to 7 years to break even experiencing exponential growth. Putting our focus on long term business project in perspective will not only help us as individuals but also as a people and nation. For example I have a vision of planting 100 Million economic trees in 10 years and I have done my feasibility study, needs assessment and impacts analysis. I realized that instead of going extreme technically it is best to just start. I also discovered that the easiest way to do crowdfunding and crowdvesting is through Blockchain Technology so I created a cryptocurrency for the entire project which I called Cowries 1 Like |
Re: How Do Startups Raise These Huge Funds ? by Nobody: 11:19am On Jul 13, 2021 |
Plomo: By what modality is IPO given out ? Isn't it "shares" (as in stakes ) ? |
Re: How Do Startups Raise These Huge Funds ? by Nobody: 11:34am On Jul 13, 2021 |
Ynix: Thanks. So what would have been needed is only $20,000,000 (even though its valued at $50M ) ?? Secondly, would it be when the company has had revenue from $50M (being the initial projected value) that the shareholders start to get their ROI ? |
Re: How Do Startups Raise These Huge Funds ? by Nobody: 11:42am On Jul 13, 2021 |
Ynix: Big ups. And creating a crypto I think that's on a whole new level. Keep it up. With time we may get to know better. |
Re: How Do Startups Raise These Huge Funds ? by Plomo: 11:54am On Jul 13, 2021 |
kiako: There are SEC regulations for executing IPOs. 1 Like |
Re: How Do Startups Raise These Huge Funds ? by Nobody: 12:07pm On Jul 13, 2021 |
Plomo: Ok |
Re: How Do Startups Raise These Huge Funds ? by Nobody: 2:19pm On Jul 19, 2021 |
Plomo: I'm curious to know when is right to say that one has started having profits such that it could be counted as a year to pay shareholders their stake in the profit ? For EG if a firm raises 200000 for a comapnay valued at 1M., and makes 200000 as profit even after paying staff and all that, does it imply one now has to pay the shareholders the 10% of the profit for that year which is their stake proportion or wait until profit (and all value of the company in terms of machinery etc ) reaches that 1M USD before he can start counting from there to know what is the profit ? Thanks |
Re: How Do Startups Raise These Huge Funds ? by LikeAking: 6:15pm On Jul 19, 2021 |
kiako: Start from TEF and co. As regards funding, you have to make some reasonable profit from your business. They hardly fund ideas, they fund biz. |
Re: How Do Startups Raise These Huge Funds ? by Nobody: 1:25pm On Aug 04, 2021 |
LikeAking: You mean TEF ? |
Re: How Do Startups Raise These Huge Funds ? by mboy4real(m): 1:52pm On Aug 04, 2021 |
Don't be doubting thomas try and register with this link and make money https://online-ng.net/index/user/register/27280.html
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