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Let’s face it, starting or growing a new company is not easy. However, as you look around, there are all types of businesses proving that it is not impossible. When you finally sit down to craft your business plan you find that reality starts to wane your enthusiasm. It seems that you need money to get this thing off the ground. How do you start if you need money for payroll, utilities, software development, rent, legal, marketing and sales, supplies, insurance, taxes etc.?
The most typical type of funding is Debt Funding. On average, 68 percent of start-up financing comes directly from the pocket of the business owner [source: Consumer Reports]. Debt funding comes in all forms such as personal savings, retirement, 401K, home equity line, second mortgage, bank loan, and friends & family. These can be good choices for you, however, they all come with the same risk. If your business is not as successful as you hoped, you still need to pay your debts.
Another form of funding is Equity Funding. Examples of equity funding are Venture Capital or Angel Investment. This is a very good option and can offer more than money with critical introductions, management advice and sometimes sales. However, you must be prepared to give up ownership. A VC firm typically receives anywhere from 10% to 50% of the company in return for its investment.
And then there is Bootstrapping. Some business models, especially service companies, have the opportunity to get the company started with a very small investment and then use the profits of each sale to grow the business. This is ideal if you are able to build your own products and services and have the time available.
Wouldn’t it be nice to have a perfect blend of all of these to make it easier? This is where Nextdrift Technologies can help. We believe we have created a unique alternative service called techstrapping.Techstrapping is a service in which a bootstrapping venture partners with a technology company that provides technical assistance and software development at a low cost for a share in the growth.
Techstrapping is designed for existing consulting businesses who would like to expand their offering by creating a hosted software solution. However, if you are contemplating a new startup venture, we offer a blend of startup and techstrapping with our approach of:
- Small Personal Debt Financing - small investement made by you to help cover your own salary, insurance and miscellaneous expenses. This is a great first test. If you don’t believe in the idea, then how will your clients?
- Client Bootstrapping - find your first client who believes in your idea and is willing to help but would expect some type of return. Most companies will give you office space, advice and the critical first sale in return for a lower price and the ability to have say in the development direction. This is ideal if your product can be a consultative service to begin. Nextdrift can help formulate this agreement.
- Techstrapping - if you cannot do it yourself, your largest costs will be the design, development, deployment and support of your idea. Nextdrift has developed a unique program that provides these services as an investment to your startup eliminating the out of pocket expenses needed to get going. Like an Venture Capital or Angel Investor, Nextdrift will require a stake in your software sales. Unlike the VC or Angel, we do not need to force a sale to pay back our Techstrapping professionls. Our payment will be in the form of growth sharing both risk and prosperity.
- Venture Management - all startups could use assistance with sales, marketing and legal expertise. These services are available as additional investment options based on your level of need or growth projections.
Contact Nextdrift for additional information and real life examples of our success with companies such as yours.
Nextdrift offers consulting services to those who do not require a shared risk approach. Customized consulting engagements are developed to target prioritized areas of need and can range from a single day to long term consultative assignments. This is ideal for small to mid-size companies who are in start-up mode or approaching a growth stage.
- Instituting Business Planning Process
- Performing Customer Need Analysis
- Recognizing Opportunities / Product Placement
- Developing Sales & Marketing Strategies
- Defining Competitive Landscape
- Managing Analysts & Product Messaging
- Custom application development
- Euphoric customer satisfaction and support
- Systems integration
- Product roadmaps & development schedules
- Managing analysts & product messaging
- Electronic Discovery (eDiscovery)
- Records Retention / Records Management
- Enterprise Content Management (ECM)
- Product Development / Support / Delivery
- Software as a Service (SaaS)