This class starts with a broad view of what kinds of financing works for what kinds of startups. While most entrepreneurship classes focus on the more sophisticated finance related to venture capital, we want to also look at what happens in the vast majority of the real world startups. Including:

• Most startups are self financed, which is what we also call bootstrapping. I saw a study published by Wells Fargo, in about 2005, showing that the average cost of a startup in the United States is $10,000.
• We do not want to forget the difference between owning a business entirely yourself, and dealing with partners. Essentially, if you can own it yourself, then you’re probably better off. One exception to the rule is when you want to have partners for reducing risk, bringing in know-how and experience, and peace of mind.
• Most businesses have some level of startup cost estimates related to strategy. It’s much more about strategy than it is about requirements of the type of business. For example, food service startups run the gamut between costing almost nothing for some kinds of catering, to the startup costs of a portable lunch stand, to the startup costs of a small local restaurant, to the startup costs of an ambitious restaurant in a major urban location.
• Types of financing depend on at least two factors: first, the size of investment required; second, the desireability of the investment to potential investors; and third, the preference of the startup entrepreneurs themselves.
• Venture capital is limited to a few thousand (maybe 5K, 6K, something like that) new startups every year. These are very exclusive ventures, with proven management teams, defensible business models, good markets, and good product-market fit.
• Angel investors are generally organized and knowledgeable, and they qualify as investors according to the SEC. Some research indicates more than 200,000 angel investors in the United States. They invest amounts in the hundreds of thousands, generally.
• Friends and family should be very carefully limited because there are a lot of legal restrictions. These investments might work for tens of thousands of dollars, in some cases hundreds of thousands.
• Bootstrapping is doing it yourself, without outside investors, without sharing ownership, with or without bank loans, credit card financing, or other borrowed money.

The class will not meet On Monday, May 4, so this class is a matter of doing the readings and watching some online videos (below).  I’m comfortable with this because I’ve made so much available for you as online video, web materials, and readings.

Guy Kawasaki’s latest book, Reality Check,is a very good convenient desktop reference (in a way) to some good common sense advice on many aspects of startups, small business, and work in the cubicle world.

I called it What Biz School Can’t Teach when I reviewed it on my main blog. And below, from BNET, is a video of Guy talking about it.

If, for any reason, you don’t see the video on this page (there are technical reasons, having to do with your system, your bandwidth, add-ons and such), you can probably find the video directly on the source site, using this link.

You’re going to do this class by yourself, going through the following web videos. Brace yourself, because there might be a pop quiz later, something like recognizing which slide in a set of slides wasn’t included in the videos.

The Back to Fundamentals Series: this is from a webinar given in November 2008. The total is 50 minutes. It divides into four parts.

• Part 1: Back to Fundamentals
• Part 2: The Heart of the Plan
• Part 3: Flesh and Bones of the Plan
• Part 4: Dressing and Growing

Few businesses are really one-person businesses. Even those with no employees are still likely to need bookkeeping and accounting help, an attorney, and business allies.

This session covers gathering the initial team, working with your required professionals, planning for and then recruiting employees, and a review of the legal implications of the employer-employee relationship.

For this topic area the readings are essential.

Online Videos

You are required to go through the web video presentations as follows:

1. Basic business numbers
2. Guy Kawasaki on The Art of the Start

Have you heard about death by PowerPoint? Or have you suffered it, perhaps, with people reading long and boring lists posted up on the screen by a projector.

We’re doing two things in this class:

1. focusing on the classic pitch presentation, the new darling of the venture capital and investment world, as highlighted by the readings; and
2. developing good presentation techniques, the opposite of death by PowerPoint and boring.

This will be our final preparation for your participation in the venture competion at the end of the course (those of you who are chosen) and also our own final event, the presentation you give for the class.

This is a web-embedded video from an entrepreneur who is also an investor, talking about what investors want to know, and what they want to see in a pitch.

If for whatever reason you don’t see the video here, you can click this link to go to the source video on the TED site.

There’s a five-minute video interview with me talking about the 3 types of startups on the SBTV site.