MONETIZINGAN IDEA

NICHOLAS FAINLIGHT

NICHOLASFAINLIGHT.NET

WHAT'S THE VALUEOF A STARTUP?

@NICK_FAINLIGHT

This may seem like a no-brainer, but it begs the

question: what is a company actually worth to

investors? Monetizing a future business is a

delicate dance between investor and founder

because the two may not see eye-to-eye on

what the value of your company is.

ONE OF FIRST STEPS OF MONETIZING AN

IDEA IS GETTING OTHER PEOPLE TO INVEST.

HERE ARE SOME TIPS FOR

GETTING THE MOST OUT OF

YOUR BUSINESS IDEA

WHERE ARE YOU

REALISTICALLY?

For any investor to get a good grip on your

company they need to understand your vision,

but they also need to have a realistic idea of

how much work is done - or still needs to be

done.

What stage you are in?

How much thought and time have you put

into your business?

Do you have a functioning product/service

or is it still in the prototype phase?

Do you have a partner/employees or is it

just you?

SOME QUESTIONS

TO ASK YOURSELF

How much money do you need to get off the

ground or to get where you want to be?

SHOW ME THE MONEY

A good rule of thumb to follow is to have enough

money for three “experiments” (additional

products, new location, equipment, marketing) and

for six months of runway. This will be a good

cushion to push you through before you, hopefully,

start pulling a profit.

Any investor worth his or her weight, quite literally,

in gold will be looking at the current market to see

how other businesses like yours are out there.

They will be looking at how profitable they are,

what their success has been, and how much

competition is out there.

MARKETSHARE - COMPETITIONMAY HELP YOU

At this stage in the game, competition can help

you. If there are others out there that have had

success in your field, this significantly lowers the

risk in an already risky investment.

Are you an industry superstar or is this your first

go at running a company? Investors will feel better

backing someone who has an impressive track

record. The more successful you have been in your

field or in business, the more money you and your

company is worth - so don’t sell yourself short!

PRIOR SUCCESS

You are the first asset

of your company.

"10xer" is a term angel investors often use to

refer to a company’s potential to produce 10

times the initial investment. Most investors are

well aware the at least half of the startups they

decide to fund will ultimately fail, maybe before

they even break even.

“10XER” POTENTIAL?

With that thought process, a potential investor

will most likely invest in a company in the first

place if they believe you have 10X potential.

In order for investment firms to make any money,

they need to bank on the fact that 1 out of 10

investments will yield at least 10-30 times what they

originally invested to be able to make any money.

Now that you have a pretty good idea of where you

stand and how much your company is potentially

worth, it’s time to get out there are start seeking

out investors. Make sure your pitch is rehearsed,

you back everything up with facts, and you can

generate FOMO (fear of missing out).

HIT THE GROUND RUNNING

Generating FOMO is especially important because

no investor wants to be kicking themselves when

you become a 10Xer they didn’t invest in.

NICHOLAS FAINLIGHT

NICHOLASFAINLIGHT.COM

@NICK_FAINLIGHT