Is Your Business Fundable?

Different capital sources define “fundable” in a variety of ways.  A business that may currently be unfundable by a venture capital firm may be fundable by an angel group.  Another company may be unfundable by a bank loan or an angel group, but may be fundable by several informal investors. 

For practical purposes, we’ll define a “fundable” business as one that has a reasonable chance of securing funding from well-aligned funding sources.

For New Businesses

If you are thinking about starting a new business, ask yourself the following questions:

Do you have a great product or service idea, or a complete business system?

How do you know that customers will buy your product or service?

Who are your key associates (employees, subcontractors, and strategic partners) that will deliver your products or services?

When will your business achieve positive cashflow?

When will your business achieve profitability?

How much profit can your business reasonably generate the first 12 months after achieving profitability?

How much funding will your business need to achieve positive cashflow and profitability?

How much capital can you personally contribute to the funding of your business?

Assuming you had the right preparations, how much money could you get from friends and family to help launch your business?

How much revenue per year can your business generate at the end of 3 years?

Assess how fundable your new business may be here.

For Existing Businesses

If you have an existing business, consider these questions: 

Does your business have positive cashflow?

Does your company operate profitability?

What will you use the capital for?

Is your company a lifestyle business or a scalable business?

How many of your existing channels, partners, and customers will support your new business volume?

How much revenue per year do you expect your expanded business can generate at the end of 3 years?

Assess how fundable your existing business may be here.