If you’ve watched HBO’s Silicon Valley, then you know how the fundraising process goes: Build some awesome tech, show it to some guys at a venture fund, and get funded. Right? Not really! Even if that was the case, what happens if you need money somewhere between having the idea and getting funded? While everybody knows about angel investors and venture capitalists, they’re generally not going to fund an idea, let alone an untested one from a first time entrepreneur, given the plethora of other investment opportunities they have before them.
The good news is, as you can tell from the title, there are many other sources of early stage funding to help you take your venture from an idea to the beginnings of a scaleable business:
There are numerous non-dilutive (free!) grant programs, competitions that award cash prizes, and of course crowdfunding platforms, all of which exist to help fund the earlier phases of venture formation. To apply or enter for many of these, you’re not even required to have developed a product or gained any traction with customers. The application process typically involves meeting qualification requirements (e.g., are you a current student) and illustrating the merits and potential impact of your idea. As a bonus to being awarded money, several programs also offer additional programming, training and resources to help you develop your venture.
One of our favorite programs is VentureWell’s (formerly the NCIIA) E-Team program. The E-Team program provides up to $25,000 in non-dilutive funding for the development of innovations that are scalable, commercially promising, and have a positive impact on society and/or the environment. In addition to funding, the program includes training, and mentorship for teams comprised of a minimum of two current undergraduate or graduate students:
- Stage 1 includes $5,000 in funding and a market validation workshop to help teams identify a target market and articulate their unique position and competitive advantage in that market.
- Stage 2 comes with $20,000 in funding, business model workshops, and tactical coaching sessions from experts in the network
- Stage 3 focuses on learning how to pitch to investors and could result in a $50,000 investment from the NCIIA and it’s partners.
There are three deadlines to apply. This academic year, the deadlines are on October 3, 2014, February 6, 2015 and May 8, 2015.
Another great resource is the NYU Prototyping Fund. The Fund provides NYU students with the encouragement, resources, and tools you need to start bringing your ideas to life. The Prototyping Fund is a collaborative program offered by the Greenhouse at NYU Polytechnic School of Engineering and the NYU Entrepreneurial Institute. Multi-disciplinary teams from across NYU are eligible to receive up to $500 in funding to build a hardware or software prototype toward articulating their value proposition, testing their assumptions, and moving to the next stage of product development.
Yet another great way to help fund your startup are the several startup competitions at NYU and elsewhere. The grandaddy of them all is the $200,000 NYU Entrepreneur’s Challenge, an 8-month competition to help aspiring entrepreneurs develop their business model. Through workshops, bootcamps, and coaching, teams compete for a combined $200,000 in prizes! You can start with just an idea at the beginning of the competition, and finish with a well-formulated early prototype and business model.
Graduating? For graduating students pursuing their ventures full time, the NYU Summer Launchpad helps build on the momentum gained during the school year from these other programs. In addition to $7,500 in initial “no strings attached” funding, the Summer Launchpad provides you with working space, connects you to seasoned entrepreneurs and investors, and accelerates your customer development process as you search for a scalable and repeatable business model.
While it’s the draw of free money that brought you here, it’s arguably not just the money that will help you succeed. Attend one of our startup bootcamps to learn more about fundraising myths, truths and the many resources available to help you turn your idea into a startup business.