A company’s business model is how it approaches the market in order to earn revenue and maximize its profits. Digital business models are a refinement of this business model definition focusing on digital products and services, along with internet-related businesses. In most cases, the digital business model evolved from traditional models (Blockbuster to Netflix) that have been adapted for the Internet or other digital channels. Some models have evolved and changed in the digital era, but they remain the children of earlier models.
In many ways Angel Investors are looking for the same things as Venture Capitalists, but there are some big differences that companies should be aware of that will play a part in shaping their financing strategy.
An angel investor is a high net worth individual with a net worth excluding their home of $1 million or more, or who has an income of $200,000 per year (or $300,000 for a married couple) with the expectation that this income will continue into the future. Angels differ from Friends and Family who will typically invest very early on when all you’ve got is an idea and who will invest in YOU rather than in your company.
Crowdfunding is asking a crowd of people to donate a defined amount of money for a specific cause or project in exchange for various rewards. There are three general categories crowdfunding can fall under: Equity, Donation, and Debt.
Equity-based crowdfunding is asking a crowd to donate to your business or project in exchange for equity.
The larger your network is, the better, that’s a given. Venture Capitalist’s would be at the top of this list. A warm introduction is also a must as even last new firms saw 800 deals on average. Bigger firms see even more. VC’s use filters – where did you go to school? What company did you use to work for and most important, who referred you? The larger your network, the more your network likes what you are doing, the more likely they are to introduce you.
One top venture capitalist was quoted saying “Startups are really f—g hard. If you don’t even try very hard to get introduced to me, how much effort can I expect you to put into your company?”