Venture Capital: How to raise funds for your business by Kaiwen Leong, Wenyou Tan, and Elaine Leong (Cavendish)

TL;DR - Family, friends, and fools (FFF), Angel investors, and VC are ways to fund a company. There are 3 types of VC, each with different incentives.

Helpfulness - 3

Topic Tags - Government Venture, Corporate Ventures, Fundraising, Angels, FFF, incentives

Questions answered:

  • What is FFF?
  • What types of VC firms are there?

Summary:

  • Family, friends, and fools (FFF), Angel investors, VC, Government venture, and corporate venture are 5 sources of capital for startups.
  • FFF are people who will support you even if they don’t know anything about your business model. Keep that in mind when taking their advice.
  • Within angels, there are two main types. 1) rich people funding people to pay it forward to the community, 2) rich people who like to gamble. Pitching to 1) is easier than 2).
  • VC is professional, has lots of money to throw at you, and has powerful connections. To pitch to these firms, some degree of progress is needed.
  • Government venture companies are similar to VC firms but also have interests in nation-building. A great example is the SEEDS fund of Singapore.
  • Corporate venture companies are run by multi-national-corporations that invest in companies that are complementary to the products/services they sell. They have a corporate venture to scan the markets and diversify their risk (for in-house R&D).