Absolute Entrepreneurship Part 2: Funding Your Business

Distinguish needs from wants to craft two budgets—essential and fantasy—and explore bootstrapping with a bring-your-own-laptop approach to cut startup costs.

Determine seed money by budgeting six months of founders and staff salaries, licenses, rent, advertising, and other essentials, then separate essential and ideal costs for startup funding.

Identify and plan your one-time costs after seed money, distinguishing recurring costs from one-time equipment and manufacturing needs, and establish a sinking fund to cover replacements.

Identify ongoing costs and the burn rate, including salaries, taxes, insurance, rent, utilities, advertising, inventory, and staff training to sustain a startup.

Understand burn rate as the monthly cost to run a company, calculate break-even revenue, and plan how fixed and variable costs influence profitability and debt repayment.

Identify fixed and variable costs by volume, using rent as fixed and stamps or cost of goods as variable, and learn how bulk buying and cheaper suppliers reduce variable costs.

download a virtex template to map fixed and startup costs, estimate monthly expenses, and project six months of burn rate to plan a startup budget.

Explore equity financing: founders sell pieces of their company to raise capital, inviting investors who bet on future value and share ownership, while noting the risk and control implications.

Begin equity financing with friends and family to raise initial funds, agree on a small equity stake, and then consult a lawyer to formalize documents and costs.

Angel investors are rare early backers who may take 20–40% of your company, offering money, time, and expertise for big risk, big reward.

Venture capital firms finance other companies by equity, seeking low risk and high reward. They back fast-growing ventures that show tangible profitability or patents, aiming for rapid value creation.

Discover how to locate angel investors and venture capitalists in Minnesota by researching firms, evaluating their focus areas such as medical devices, and tailoring your approach to their funding criteria.

Equity financing offers large funds but costs control and creates hard to unwind partnerships, so start small, build big, and explore other financing options to preserve equity.

Explore debt financing as a corporate loan to fund growth, bank requirements, and the role of credit history, illustrated by a $40,000 Slam Academy loan.

Explore lenders like banks and the SBA, learn debt financing terms, and understand personal guarantees, equity considerations, and how to secure funding from friends and family.

Explore SBA loan programs, including the 7(a) loan, and review eligibility for for-profit small businesses in the United States, such as equity, need, and sound use of funds.

Prepare for a business loan by deciding minimum amount you need, outlining repayment, and gathering documents like a business plan, state certification documents, tax returns or a PNL, and collateral.

Learn how to read loan terms, including interest, fees, grace periods, and prepayment, and assess capital expense restrictions and default outcomes for sound financing.

Factor debt into your startup costs by including loan payments, interest and principal as fixed monthly costs, illustrated by a $10,000 loan with a $250 monthly payment over six months.

Explore how grants provide non-repayable funding with strings attached, including the competitive application process, usage restrictions, grant periods, reporting, and tax considerations.

Consider your niche when seeking grants, as programs target nonprofit, for-profit, women, African-American, or Native American ventures. Apply well, then forget about it; grants are highly competitive like the lottery.

Explore federal grant opportunities for small businesses by using grants.gov, filtering by deadlines and eligibility, and evaluating funding categories and agencies to find suitable grants in education and beyond.

Discover state and local grant opportunities for small businesses, including education and employment grants, and private and nontraditional grants; learn to contact program officials for guidance.

Explore private and nontraditional grants from large corporations that support art, tech, disaster relief, and community projects, including for-profit and nonprofit pathways, with examples like Google, 3M, and Target.

Identify grant money sources, align proposals with the funder's tax-funded beneficiaries, and show how your venture serves the state or community, from nonprofit to private grants.

Create a reusable grant-writing workflow by building a grants folder, saving past responses, and copy-pasting tailored sections to fit each funding opportunity.

Bootstrap your company with minimal investment and no debt, keeping all equity, and wait for returns. Test the market, reinvest profits, and grow into a big business.

Bootstrapping benefits from a strategic co-founder who covers your missing skills, like building an e-commerce site, while sharing equity and providing emotional support.

Bootstrapping works best when you can generate cash quickly. In a basement class, word-of-mouth brought in paying customers, we earned cash fast, with no expenses, and reinvested to scale.

Be a budget ninja by using one dedicated business checking account and scrutinizing every penny, ensuring both partners stay on the same page and avoid waste.

Keep your day job while bootstrapping; devote after-hours work, cut back on social life, plan a cash infusion, reinvest earnings, and delay paying yourself until you’ve built a comfort cushion.

Learn to avoid outsourcing by doing it yourself, using online resources to build your website and other basics. Invest time to learn now; outsourcing is a luxury for later.

Learn to build a website yourself with drag-and-drop tools like Squarespace to save money, avoid overpaying, and understand website fundamentals for future hires.

Form strategic partnerships with other companies or organizations to elevate your bootstrapped startup, using unique offerings and free social media promotion in mutually beneficial collaborations and promotions.

Understand crowdfunding as reward-based funding where backers pre-purchase a product, often via all-or-nothing campaigns on platforms like Kickstarter, with practical caveats.

Discover how pre-selling your thing works by offering tiered rewards, from a £10 limited edition print to bundles of cups and plates, and even experiences like a private tour.

Run an active crowdfunding campaign with daily promotion, social media advertising, and a high-quality video to attract backers, not just relying on Kickstarter. It requires planning and marketing.

Explore next steps in startup funding, weighing debt and selling equity while embracing the risk and reward of entrepreneurship. Anticipate the next class and bonus material at the end.

Thank participants for hanging out and invite them to access future classes and other courses through coupon links offered at a discounted price.