Capital Archives | Evan Vitale

Evan Vitale – What’s Next If Your Crowdfunding Plan Fails?

March 9, 2016 by Evan Vitale

By Evan Vitale

You’ve researched, planned and prepared an awesome presentation for your crowdfunding campaign and then it bombs. Now what?

Get up. Brush the dirt off your pants and try again. Right?

Before you take the same plan and presentation and create a new campaign at a different crowdfunding site (which might also cause yet another failure), you should first step back a little and review the following:

Is your idea a great one? Everyone “thinks” they have an awesome idea, but is it really that great? If so, then why didn’t you reach your campaign goal? Was it something in the presentation or did others feel like perhaps your idea isn’t as hot as you think it is?
Review your plan. What’s missing in your project or idea plan? Did you offer enough details to your investors? Check and see if there were any unanswered questions during your campaign. Remember, as you create your plan and presentation think of all the questions someone might ask if you were making the presentation face-to-face. Then, make sure all of those questions are answered in your campaign presentation.
Review your financial goals. Are you dead-on with your requests or are you asking for too much money?
Review your presentation. Did it fail to wow your crowd? What’s missing? What can you do to make it better; keep people’s interest and make them become part of your financial crowd?
It could be that perhaps you presented your plan on the wrong crowdfunding website. They are all different and, perhaps, a change might be the key to reaching your campaign goal.

Once you have answered those questions and made the necessary edits, changes and updates, then it’s time to start your crowdfunding campaign again. A first-time failure doesn’t mean you’re finished. It means you’re gaining experience!

Evan Vitale – Crowdfunding Your Startup

March 8, 2016 by Evan Vitale

By Evan Vitale

In our previous blog posts, we introduced crowdfunding and how it works for businesses, charities, individuals and more. Now, let’s take a look at how you might consider using crowdfunding for your startup business.

Capital, financing, money, etc. (whatever you want to call it) remains the No. 1 challenge for any startup in order to launch your dream; get things off the ground and have remaining fundings to maintain growth.

Simple, right?

If you don’t have cash on hand, you might first turn to a bank for financing. However, a financial institution will need collateral such as a home in order to secure the business loan.

Your next chance might be with family or friends. Maybe you’ll look for an angel or a venture capital firm, etc.

Or, perhaps, you’ll skip all the aforementioned red tape and go directly into seeking funds from crowdfunding opportunities (i.e., Kickstarter, Indiegogo, etc.). Will it work?

It all depends on you. For example:

You might have a great idea, but you’ll need to package and present it in a way to attract potential crowdfunding investors. The first challenge to any crowdfunding project is to get donors interested in helping you. Your presentation will be like a sales pitch in that you need to get people excited.

Let’s say you want to raise $25,000 for your startup idea. Here, instead of giving every donor a percentage piece of ownership, they will receive a gift for their donation. This might be the product you hope to create and sale or something simple like a coffee mug.

Ask for exactly what you need. If your startup requires $25,000 then create a crowdfunding plan and presentation seeking $25,000. Don’t ask for more or less. Some plans have hit their target very quickly and some fall dreadfully short.

The best way to begin your crowdfunding plan is by doing research. This includes:

Talking to your accountant, your banker and your attorney.

Consult with your business coach, if you have one.

Visit and do deep research on crowdfunding sites. Know them inside and out. Investigate plans that succeeded and those that failed. What did they do right, or wrong?

If your first crowdfunding attempt fails, find out why. Did your potential investors not like your plan, idea or product? Or, did your presentation fail to “wow” them? Every idea isn’t going to be an instant winner and, yes, some great ideas never get off the ground because startup owners didn’t prepare a selling presentation to attract investors.

Evan Vitale – Capital Snapshot

December 10, 2015 by Evan Vitale

By Evan Vitale

In our six-part series on different types of capital, we offered some basic information as to the different types of capital and investors available for your business.

Here’s a quick review:

Debt Capital – This is capital that a business raises by taking out a loan. The loan is normally repaid at a future date, normally with interest.
Equity Capital – Typically you do not need to pay anything back to the investor. Instead, you are selling complete or partial ownership interest in your business in exchange for the capital.
Private Equity – Similar to a bank loan, private equity funds come from private individuals – or a group of individuals – who make investments or loans.
Venture Capital – These funds are usually for startups or growing businesses and come from venture capital firms specializing in building high-risk portfolios.
Angel Investors – An “angel” investor is someone who is typically a family member or a friend who is really investing in the individual. They want your business to be successful, but they are not looking to gain huge profits from their investment.
Investors – Investors are those who seek to grow their investment and earn an ownership stake in your company with their investment.

Evan Vitale – What Is An Investor?

December 9, 2015 by Evan Vitale

By Evan Vitale

(This is Part VI in our series on different types of capital, including debt capital, equity capital, private equity, venture capital, angel investors and investors)

An investor in your business can wear many hats and the term can mean different things to different business owners and types of businesses.

However, usually, an investor is a person who commits capital with the expectation of financial returns.

They are definitely looking to grow their money and, therefore, they generally prefer to minimize risk while maximizing their returns.

In most cases, investors want to call the shots with your business and become part of your team, which might not work for some startups and business owners who don’t want to give up a share of the company.

Evan Vitale – What Is An Angel Investor?

December 8, 2015 by Evan Vitale

By Evan Vitale

(This is Part V in our series on different types of capital, including debt capital, equity capital, private equity, venture capital, angel investors and investors)

While an “investor” is considered as someone who provides financial backing for small startup businesses or entrepreneurs, an “angel investor” is someone who is usually a family member or a friend (or a friend of a family member or friend). They are a little “closer” and connected to you in some way.

Typically, the capital they can provide can be:

A one-time injection of seed money.

Ongoing financial support.

Funds to help with expansion or to buy a piece of equipment.

Angel investors invest in the person rather than in the business. They do want your business to succeed, rather than be on the receiving on of huge profits from their investment(s).

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Check out Evan Vitale on http://about.me/evanvitale.

Evan Vitale – What is Equity Capital?

November 26, 2015 by Evan Vitale

By Evan Vitale

(This is Part II in our series on different types of capital; including debt capital, equity capital, private equity, venture capital, angel investors and investors.)

Equity Capital, when compared to debt capital, is different in that you do not need to pay anything back to the investor.

No, it’s not a free loan.

Instead, you are selling complete or part ownership interest in your business in exchange for capital. Typically, an equity capital situation may arise with large-scale businesses who are running short of funds.

A common source for equity capital is from family members and relatives. In fact, in a recent survey, 30% of entrepreneurs said they raised all or part of the capital they needed through family members.

Be sure to talk to your business attorney before seeking equity capital. Know the risks before your seek this type of financing.

Also see: What is Debt Capital?

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Check out another blog by Evan Vitale here: http://evanvitale.com

Evan Vitale – What Is Debt Capital?

November 24, 2015 by Evan Vitale

By Evan Vitale

In our next few blog posts, we’ll discuss different types of capital, including equity capital, private equity, venture capital, angel investors and investors.

But first, let’s talk about debt capital, which is the most common type of capital.

Debt capital is the capital that a business raises by taking out a loan. The loan is normally repaid at a future date, usually with interest.

Typically, debt capital is obtained from your regular bank or, if the loan is large, then it may come from an investment bank. Consider a debt capital loan just like taking out a loan for a home mortgage or for an automobile.

The big difference between debt capital and other types of capital is that the lender doesn’t become part owners of your business. However, some debt capital lenders expect to earn up to 10% interest (or more) off the loan.

Debt capital is very common among entrepreneurs, who the investor believes most likely will pay off the debt by an agreed-upon deadline.

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View presentations by Evan Vitale at http://www.slideshare.net/evanvitale.

Evan Vitale – Private equity performance not dictated by how fast capital called — study

September 1, 2014 by Evan Vitale

Private equity funds that called a greater percentage of capital than other funds in the same vintage year did not outperform their peers, a new study by private equity fund-of-funds firm Pantheon shows.

Contrary to popular belief, calling capital quickly compared to other funds raised in the same year, “doesn’t say anything about final outcome,” said Nik Morandi, partner and head of research and portfolio strategy at Pantheon. Mr. Morandi is the author of the Pantheon study, titled “Private Equity Cash Flows and Performance Patterns.”

Calling capital quickly did not result in a higher probability that the fund would produce top-quartile returns over the life of the fund. The result was the same when performance was measured by internal rate of return and by total value to paid-in return.

However, there is a relationship between distributions and returns, the study found. Private equity funds that distributed more than funds in the same vintage year during the typical five-year commitment period were more likely to produce top-quartile returns over the long term. For this analysis, performance was measured in multiples since the results would be skewed when measured by IRR because funds with distributions will have better IRR, Mr. Morandi said.

Private equity funds whose distributions were within the top 25% of funds in the same vintage year in terms of distributions outperformed their peer groups.
What’s more, the deeper a fund’s J-curve — indicating a fund’s negative cash position, the lower probability the fund would generate a top-quartile return.

Pantheon’s study was based on data for 322 U.S. buyout funds raised between 1992 and 2007, using fund performance data through the second quarter of 2013.

Evan Vitale – Come And Get It: $70 Billion Available

June 5, 2014 by Evan Vitale

Global hedge funds are looking to further expand in Asia over the next few years – and expand they will. A Barclays survey states that as much as $70 billion is available.

Hedge fund managers are looking to uncover a pot of gold. -- Evan Vitale Finance & Accounting

Hedge fund managers are looking to uncover the pot of gold that lies in Asia.

Due to the increase in sovereign-wealth funds, as well as the private wealth throughout Asia, have opened the door for managers to invest.

Currently, Asian investors account for approximately $150 billion in global hedge funds. This is just over five percent of the total amount invested in global hedge funds.

Hedge fund managers are targeting corporate pensions in Japan, which are seeking alternative investments. Also, Korean institutional investors are seen as likely suitors to jump into global hedge funds.

David Bennett, the head of capital solutions at Barclays, said that managers in North America believe there is a pot of gold in Asia that has yet to be uncovered.

“There is definitely a lot of potential here in terms of raising assets,” Bennett said. “Realizing that potential is a very different matter.”