P1: OTA/XYZ P2: ABC
c20 JWBT144/Gordon September 25, 2009 17:55 Printer Name: Courier Westford, Westford, MA
ears ago, my banker recounted the parable of a naive young man who was
determined to ﬁnd his soul mate. Week after week, month after month,
the young man would go to singles events, searching with eager anticipation
for the woman of his dreams. Frustration mounted as time after time his
hopes were dashed. The problem? He would show up unshaven, hair snarled,
unwashed, poorly dressed, wrinkled, and odorous. In a word, he was unkempt.
Worse still was that his shabby reputation would precede him to every singles
event thereafter. I got the point.
My banker was letting me know not so subtly that my venture was unkempt,
and that I should not try to raise capital until I cleaned up my act. “For starters,
you need a funding plan,” he told me.
A funding plan ties together six elements. In this chapter, you learn to:
1. Clarify your business goals.
2. Understand your money needs at each stage of growth.
3. Select appropriate sources of capital.
4. Improve your chances of equity investor interest.
5. Take the most likely path to early-stage funding.
6. Orchestrate the funding process.
Money is the fuel needed to get your venture onto the launchpad and then
propel it into space. Prelaunch, you will need money to develop and market-
test your new product, to purchase an initial inventory, to pay for the ﬁrst
several months of ofﬁce rent, to buy equipment, to pay salaries until cash
starts rolling in, and so on. After liftoff, you will need working capital to fuel
growth. Every business has different money needs at each stage of its growth.