How an Online Entrepreneurship Course Can Help You Get Startup Funding (Sponsored Content by James)
Almost all startups will need external funding sooner or later. Although it seems like a simple process, obtaining start-up funding is rather difficult because new entrepreneurs rarely have formal training in fundraising for their business. Attracting and negotiating with investors is a crucial skill that must be developed if you want to maximize the value of a deal.
Being a powerful deal facilitator allows you to negotiate better prices to maximize the value of service agreements, which ultimately benefits your organization’s finances. A online entrepreneurship course prepares budding and active entrepreneurs with the ability to obtain financing for their business. It elucidates several key financial concepts that can be used to negotiate better deals with investors.
In the following article, we look at the benefits of online entrepreneurship courses in terms of obtaining financial support for a new business by understanding some key concepts taught in these programs.
How venture capitalists make their investment choices
Although they face huge risks, VCs make large bets on new, untested ventures in risky markets. To improve their chances of securing funding for their businesses, entrepreneurs should start by learning how angel investors and venture capitalists make their investment choices. The more criteria they can fulfill, the more likely they are to get investments. Here is a brief overview of the main considerations taken into account when evaluating a potential investment.
- Target market size
VCs typically place their bets on companies that will eventually target a large addressable market opportunity. Although “big” can be a subjective term, it usually means big returns worth several million or even more. The larger the target market, the greater the chances of obtaining financial support based on product demand. Entrepreneurs must demonstrate business plans that include “top-down” and “bottom-up” market size.
- Validation of the business idea
Commercial validation refers to the process of defining the need for a product in the target market. Validation helps entrepreneurs and investors reasonably predict whether the target audience will buy their products or services and whether the business will be profitable. Investors want to invest in great “disruptive” products and services that will retain a long-term competitive advantage. An online entrepreneurship course nurtures the creativity and critical thinking that helps students come up with such innovative products.
- Management skills
Investors don’t just invest in products – they invest in a plan and management’s ability to execute it effectively. Even if the company has a great product, the lack of talented managers can be a barrier to obtaining funding; they would rather invest in a mediocre idea led by accomplished management than a great idea led by ineffective managers. Entrepreneurs must demonstrate that they have strong management skills and can execute the business plan while mitigating losses in the process.
- Risk assessment
An investor’s job is to take risks; naturally, they will want to know what they are investing in during the early stages to avoid incurring huge losses. They assess risk based on multiple factors to measure, assess and mitigate risk and entrepreneurs will need to clearly demonstrate what their business has achieved or can achieve over 5 and 10 year time horizons.
What will you learn from an online entrepreneurship course?
- The early-stage investing landscape
An entrepreneurship course is dedicated to providing critical insight into the investment landscape and how investors and venture capitalists evaluate businesses as investment opportunities. Students learn the importance of starting with a solid business plan that demonstrates management skills, the ability to read beyond the numbers in financial statements, create balance sheets, and more. Apart from economics, it also teaches various frameworks so that entrepreneurs can select a business. structure that best suits their unique proposition.
- Various sources of capital
An online course in entrepreneurship also provides insight into the various options available to investors when raising capital for their early stage business. Students learn about the different sources of capital and the pros and cons of each source. Through formal training from experienced sources, students can learn to assess whether their business will benefit from incubators and accelerators or seeding. A good knowledge of the different sources of start-up financing greatly improves the chances of obtaining long-term financing.
- Stages of the funding process
An online entrepreneurship program also provides information on how future business owners can formulate a comprehensive financing strategy. They learn about due diligence, how to assess the value of their business, how to negotiate term sheets, and how to establish common stock. Entrepreneurs with a solid understanding of the steps in the financing process can create a business plan that has a better chance of securing financing. Additionally, business owners can strive to obtain financing for the various stages of their business plan and maximize their working capital.
- How to pitch to investors and close deals
As stated earlier, venture capitalists don’t just invest in one product. The entrepreneur must convince investors that his product is valid in the long term. An online course in entrepreneurship empowers individuals to tell a compelling story for their new venture using pragmatic advice on the do’s and don’ts of elevator pitching. You’ll learn about the most effective ways to tell your business story and how to combine that with your business idea to land a deal with an investor.
- How to pitch to investors and close deals
As stated earlier, venture capitalists don’t just invest in one product. The entrepreneur must convince investors that his product is valid in the long term. An online entrepreneurship course empowers individuals to tell a compelling story for their new business with the help of pragmatic advice on the do’s and don’ts of elevator pitching. You’ll learn about the most effective ways to tell your business story and how to combine that with your business idea to land a deal with an investor.
Modern businesses focus a lot on corporate social responsibility (CSR). Investors are more likely to invest in ideas that develop society as a whole. In an entrepreneurial environment, previously unused resources, labor, and capital are used to drive innovation. Successful entrepreneurs usually strive to bring the latest technology to unfamiliar markets. Formal courses in entrepreneurial training and venture finance programs prepare students for their role in promoting social change on a global scale.
Online entrepreneurship courses are for aspiring and experienced professionals preparing for the funding round. That said, the skills learned in these courses are not only relevant for a career as an entrepreneur. It teaches various life skills that can be applied outside of business, which is crucial for the development of society as a whole. Several universities offer online courses in entrepreneurship that candidates can take at their own pace.