The amount of early stage funding entrepreneurs have needed to raise capital has changed markedly in the last two years.
Well mostly start-up infrastructure is a lot cheaper. Meaning early stage funding requirements are generally lower.
- Cloud computing
- Ability to work from Home
- Skype, Instant messaging, Web conferenceing
- Social Media for Tribe Marketing
- Incubators and Innovation Centres resource sharing
- Sourcing sites like Alibaba
All this means that many businesses and individuals can access markets, utilise world-class capabilities and serve customers in ways that only larger corporations could in the past. Once upon a time you didnt have much more than your name card holder, your landline and your brokers supposed contacts.
And … business life cycles are dropping as well. Being sold on as a trade sale happens regularly to hot properties. They are far more visible than they used to be. MOney raised is now to get to the next stepping stone and not necessarily to the end game.
That means that where $2 million to $5 million was early stage funding was sought from the ASSOB Capital Raising Platform before … the figures are now more like $600k to $2.5 million. ASSOB is well proven in this area as $600k to $2.5 million is quite achievable for most complying businesses with three rounds of funding on a proven capital raising platform.
It also means that ASSOB is used more as a platform for Government matching funds and a stepping stone to future Angel and Venture Capital contributions or a trade sale. The governance and compliance disciplines the ASSOB process instills plus the lift and legitimacy this early stage funding gives (without giving away control and being straddled with commitments to paying back interest or a percentage of turnover too early) means businesses can embrace grant opportunities or larger private equity contributions from a more solid negotiating and repayment position.
Grants obtained add to the legitimacy and credibility of a business whether they are from CA, AUSTRADE, R & D or state based. They are more easily obtained if the Board has good mentors, milestones have been achieved, some external funding is in place and it has the feel of a potential real business. Then … the next round of funding from grants or private equity is even more achievable.
The moral of the story is go after what you need to get you to the next stepping stone .
$600k to $2.5 million is achievable and often enough to bolster things for the next step.