Raising Money for a StartUp Company

Jul 03, 2008 20 Comments by Jason Nazar

I’ve spent a good deal of time in the past 12 months raising money for docstoc. I thought I understood the process, but before you really go through it yourself for your own company, its hard to get the full essence of the experience while on the sidelines.

I had selectively helped some folks raise money for their companies in my last consulting business. The truth is, no one should ever be a better fundraiser for a startup than its founders. And if you are relying on an outside 3rd party to “raise you money”, you’re likely in for a huge waste of time.

I recently found a paper I wrote while in law school on a variety of topics about raising money for startups. While it certainly won’t make any dough magically appear, in re-reading it, I do think it gives a helpful overview of the process and some important legal points, for those new to the process.

I broke it down into the following sections:

The Funding Lifecycle; Business Planning; Bootstrapping; Raising Money from Friends and Family; Legal Issues with Raising Capital; Requirement for Private Placement Memorandum; C Corporation vs. LLC, Angel Investors vs Venture Capital, California Angel Investor Groups, Trends in Angel Investment, and Typical Term Sheet Clauses
Here is the full paper on Raising Money for a StartUP Company

Raising Money for a StartUp Company – Get more Business Plans

You should also check out my friend Adeo Ressi’s (founder of thefunded.com) presentation on How to Pitch VC’s

How to Pitch VCs by the founder of TheFunded.com – Get more Business Plans

You can also find lots of helpful business planing templates on docstoc

Business

About the author

Jason is the Co-Founder and CEO of Docstoc.com, the premier online community to find and share professional documents. Before starting Docstoc, he was a partner in a venture consulting firm in Los Angeles where he worked with dozens of startups. He holds have a BA from UCSB and his JD/MBA from Pepperdine University, where he was the Student Body President of both Universities.

20 Responses to “Raising Money for a StartUp Company”

  1. Joe says:

    Quote from C corporation v. LLC: “Most states cap the number of members a LLC can have.”

    Perhaps you were thinking of S corporations. I’m not aware of any state capping the number of LLC members. To my knowledge, the major tax advantage for LLCs v C or S corporations is if the startup is to be highly leveraged:
    http://llcoperatingagreement.blogspot.com/2008/05/tax-advantages-of-llcs.html

  2. Angel Investors Guide | The M Companies says:

    [...] check out Jason Nazar’s Guide to Raising Money for a Startup Company. Jason is the CEO of Docstoc.com, an online community for document [...]

  3. vBharat.com » Raising Money for a StartUp Company says:

    From vBharat.com » Raising Money for a StartUp Company…

    I had selectively helped some folks raise money for their companies in my last consulting business. The truth is, no one should ever be a better fundraiser for a startup than its founders. And if you are relying on an outside 3rd party to “raise you …

  4. The Angelsoft Blog » Raising Money For A Startup says:

    [...] found this report that Jason Nazar, founder of docstoc.com, wrote on raising capital. It provides a great overview of the entire [...]

  5. Lawrence Kazali says:

    I love your work!
    Check out our web site. We are looking for funding now. We are in LA and I would like to meet you.

    Thanks

    Lawrence Kazali

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