When is the Best Time for Harvard Student Startups to Raise Capital?

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Hey Tech@Harvard – when is the best time to raise capital for my startup? Should I go straight to investors or should I try and generate some traction first? How do I do it? What should I say? These are some of the most common questions we get asked by Harvard Student and Alumni Startups.

There are many different ways you can raise capital for your start-up, but they are primarily split into 2 categories. You are either investing your own money, or someone else’s. We’re going to be focusing mostly on the latter, however if you are funding your startup with your own cash, continue to read on, there may be some useful information here for you.

 

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The Business Plan

The first thing you did when the idea for your startup popped into your head was write it down, right? This was your first draft at your business plan. As you continued to work through the idea, you added more and more detail each time. This is key to, not only raising capital, but also to setting the foundations for a strong and successful future business venture.

Know What You’re Selling

I have encountered numerous entrepreneurs that have great ideas, but it takes them hours to explain it. ‘The idea is this, but it also does this…no wait, it does this’. How many times do you think investors hear that? It’s a definite turn off. If you don’t know exactly what you’re selling, then how is anyone else supposed to? It’s simple, highlight the problem and provide the solution.

Know Your Market

It’s great to have ambition, but Rome wasn’t built in a day. You cannot enter the market wanting to sell to everyone, it’s impossible. Clearly identify who you want to sell to. Who will benefit from your product the most? Who is going to be the easiest type of person to sell to? This is your avatar. This is who you’ll be aiming all your initial efforts towards.

An example of an avatar for a wedding shop could be; professional women, aged 25-35, engaged, with a household income slightly above the national average, no children, works 9-5, attends gym classes with friends, spends a lot of time on Facebook, reads bridal magazines & blogs and enjoys socializing and going out for food.

With that avatar you know how, where and what to market to your ideal customer. If you’re unable to create this then go back to your business plan, ensure you have 100% clarity on what you’re offering and the rest should fall into place.

Another important consideration is how you’re going to market – are you going via traditional marketing tactic, or more modern methods like SEO and growth hacking? Which one you choose really depends on your product and your target market.

Know Your Industry

You need to know at least, the latest trends and what your competitors are providing in order to stand a fighting chance. If your customer knows more about what’s going on than you, then you’re in trouble. When you last bought yourself a car, who had all the product knowledge? And this helped you trust the salesman right? The same goes for whatever industry your startup may fall into. Become an expert in your field. It’ll also help you when it comes to selling.

Which brings us nicely onto the next point. Competitors. In order to be successful, you need to sell. Sell as much as you can. The more you sell, the more success you will see. Your competitors also know this, so they’re going to try and get as many sales as possible. Look at what they’re doing to attract customers, where are they marketing? What are the costs involved? The great thing about having successful competitors, is you have a mentor. You have proof that your startup can be successful.

Secure Your Financials

 When approaching investors, they only want to know one thing. Will I make money? That’s all. They want to know their investment is in safe hands. The best way to show them this is by taking care of your own money as if it were theirs. You wouldn’t want your money in the hands of someone irresponsible, so why would they?

Show off your projections. A realistic projection is far more attractive than crazy huge numbers. Whilst you might think six zeros looks great on your first 12 month projection, potential investors may see it as overreaching and unrealistic, which will have them turning their backs.

Perfect The Pitch

Once you have all the information above clearly outlined, write it down into an easily manageable script. Be sure to put it into your own words, no one is interested in talking to a robot. This pitch is going to be the difference between yes and no. Be sure to include all the vital information, but keep it to just that. Avoid cheesy ice breakers and jokes, you’re there to do business, let the jokes come after the yes. Too long and they’ll lose interest, too short and they’ll think you’re missing something.

Practice the pitch to friends, family, co-workers or just anyone that will listen. This will give you a good feel for how your startup is going to be received by your potential customers.

Remote Work during Harvard’s Summer Break: The Future of Work and Digital Nomadism

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Over the last decade the world of work has been slowly evolving into something quite fascinating. As globalisation comes banging on our doors, with it comes new opportunities for us to reflect on the old fashioned work-life model.

A true renaissance is on the way and I am happy to be in the middle of this exciting period, where we will see a change in the way we work and approach life itself.

Prediction of Change to Work

Arthur C. Clarke predicted this almost 40 years ago at the dawn of home computing. A true visionary, he could already see the impact this would have on the life of the average businessman.

“They [computers] will make it possible to live really anywhere we like. Any businessman, any executive, could live almost anywhere on Earth and still do his business through a device like this … It means we won’t be stuck in cities. We’ll live out in the country or wherever we please.”

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International Collaborations

This is exactly what we are finally seeing happen on a truly global level. In South East Asia, for example, we can now see many spaces and communities opening their doors to the world of international collaboration.

We are starting to see reactions from governments as well, working out how they can benefit from this wealth of information and wisdom. The idea of remote visas is a common theme and one that, once formulated, will be instantly replicated. There are also many government-funded accelerators (for example in Malaysia & South Korea) that are actively seeking collaborations from around the world to strengthen and inspire the future of their startup industry.

Co-working and Digital Nomadism

Three years ago KoHub was created, a community and space for remote workers on a small tropical island in Thailand. Over the years it has blossomed in to a thriving community from all over the Southeast Asian region and the world.

These spaces have walked in parallel with a new movement tagged “digital nomadism”. The idea is that people who have established businesses or remote workers no longer need to operate everyday from their office or even their home country and can seek work-holidays on far away shores to help achieve a better work-life balance or period of productivity.

Remote Teams

We have also seen the rise of truly remote teams, like Buffer and Human Madethat operate with a globally distributed team. The benefits of this model seems to be happier employees, a more productive team and a more profitable company. It’s a true win-win.

I have spoken with the Founders of these companies and other similar remote businesses and the overriding benefits are the same in every conversation.

There are also new tribes of remote workers travelling the world together, like Hackers Paradise and Remote Year and many new starting every day. There is a whole support community forming to aid in the sustainability of this new exciting movement.

 

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The Future

The future is hard to predict, but what is certain, is that this movement is not waiting to happen and it is tied directly with the ever increasing interconnectivity of the world as we know it.

Opportunities will be created that allow easier movement and business establishment in foreign countries and regions.

We will see many old concepts challenged. For instance, with globalisation opportunities will not fall on those by chance based on the territory where they were born. Rather, it will become increasingly based on who you are and what you can offer. Hopefully a new concept, a truly fair one, where we are all equal and one that even dreamers like John Lennon himself would have been proud of.

The future of work is here!

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About the author

James is the Founder at KoHub – a tropical co-working space and community on the island on Koh Lanta in Thailand.

Rags to Riches Inspiration for Harvard Startups: How Nick Bell Turned His Last $400 into $45million

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At the age of 24, Melbournian Nick Bell decided to quit his recruitment job and launch his own skincare business, SkinB5. But, after three years selling the product designed to control acne, Nick had just $400 in his bank account. The business wasn’t going well.

But, always an optimist, he saw a silver lining – since his business was online-only, he’d picked up plenty of knowledge about search engine optimisation over the years. In what he described as his ‘last crack’, Nick turned his bedroom into an office and invested $250 into a website to start his own SEO company, Web Marketing Expert.

Today, WME turns over at least $45 million globally, with offices in seven different countries around the world. So, how did he do it?

Reinvesting Every Dollar

Just five days after his new business launched, Nick’s perseverance had already begun to pay off and soon he had his first cheque from a paying client, whose SEO he had worked on all by himself. Soon, Nick would receive a large payment of $10,000 from one of his early clients; he decided to invest this money back into the company and was able to significantly expand, finally renting an office space and even hiring his first full-time team member.

Giving Up Home Comforts

Although Nick may be known as a Smart50 finalist today, things weren’t always going so great for him. In fact, during the early stages of his SEO business, he describes finding himself in a situation that felt like he was back at university, except for that he was in his late twenties by now. Looking back, he says that to save money, he furnished his room with items that he’d found dumped in rubbish heaps; his concerned mother even advised him to go back to the corporate life and ‘get a real job’.

Employing the Right People

Neither the hardships he faced nor his mum’s worries could deter Nick. With his experience in recruitment, he knew that hiring the right people would take his company to the top. Today, he says that he ‘has to like’ the people he works with; developing strong relationships with his team members has certainly paid off. On picking the right people, Nick says that it’s important to surround yourself with passionate employees who care about your company.

Constantly Evolving

On working in the SEO industry, Nick’s advice is that ‘a sense of urgency is absolutely critical’. With 4,500 competitors trying to beat him in Australia alone, Nick says that without a sense of urgency, he would have undoubtedly been beaten.

Delivering the Best Results

With four years working in the hospitality industry behind him, Nick knows a thing or two about delivering great customer services. His advice to fellow entrepreneurs is to always be on your game; when it comes to service, it’s crucial to always deliver on what you say to improve your reputation and relationships with your customers or clients.

The main secret? Nick always wants to do better. No matter which milestone he reaches, there’s always another one ready for him to go for.

Related Information:

Nick Bell | Sammway

Web marketing expert: How serial entrepreneur Nick Bell is taking his $45 million digital agency WME to the world | Smart Company

Beware bosses bearing ‘workplace happiness’ jargon | SMH

How WME’s Nick Bell perfected the art of the cold call | AFR

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