The reality is that the startup or early stage pre-revenue business is only worth what value someone puts on it at the time. There are no metrics to value a business on an idea or on a website or anything pre-revenue. Investors who offer money in pre-revenue situations are very difficult to find and if you find them …take the money! Do not get hung up over 5% or even 10% difference in the amount of shares they are asking for.

With the startup investment you can move your business forward.

Without it you are still on the starting line.

Investors who back start-ups are brave risk takers and should be admired just like entrepreneurs with great ideas.

So remember: a bird in the hand is worth at least two, if not many more, in the bush!!

One of the most galling issues for me over the years has been how quickly investment has been eaten up by poor cash management.

It is more often than not that the amount of money raised by entrepreneurs is underestimated and overspent.

Normally a plan is put together which overstates sales expectations and understates costs. Then, when reality bites, the two cross over and all hell breaks loose!

If you are looking for investment money, CUT your costs to the bone, do not take high salaries and ensure that the money you raise is the minimum you need to get you from A to B….. and make sure the investor knows this!!

More to follow….

According to Doug, a former TV Dragon, entrepreneurs are key in leading us out of the recession but in order to succeed, the Government needs to make some radical changes.

98% of businesses in this country are small businesses and it is their activity that are responsible for the nation’s wealth. “The innovators who open new markets, create new products, deliver new services and change the processes of business itself; by the very act of creation, destroy less efficient industries, create greater productivity and as a direct result create all new wealth.”

To encourage entrepreneurs, the government needs to change its priorities – by reducing the time it takes to start a new business; streamlining or exempting the smallest businesses from complying with regulations; providing direct tax credits and freeing up the savings of families, friends and communities who wish to use their own small capital in start-ups.

The current government funded industry of business support should be replaced by an institution that simplifies the burden on startup firms. The manifesto also suggests that the government should adopt a requirement that a specific percentage of its procurement budget is set aside for small and medium businesses.

At Ortegra our business is to turn thoughts and ideas of budding entrepreneurs into reality, facilitating the whole process of starting out. Thus we know first hand  the challenges and obstacles faced by startups and stand by Doug’s suggestions that it is time to change. If, like us, you share the same views, spread the word. After all we also agree with Doug that “staying silent is part of the problem”…