In this section:
1. You'll learn about how investors invest in startups.
2. You will be able to write up a perfect pitch + slide deck.
3. We will save you time by giving you a couple of channels to apply to multiple incubators at once.
Not every startup needs funding. While 90% of all startups fail, 75% of all funded startups fail. Which means that, being funded doesn't necessarily make your success rate higher. Just a little fact before you spend a bunch of time looking for funding and closing the rounds.
However, that's not to say that you shouldn't get funding. Money that is good for your company is what we call smart money - the kind of money that comes with brains and connections to help you grow your company.
What we could recommend is to apply to incubators around the world. These incubators often have great networks of mentors who can help you improve your startp.
Some incubators are specialized in a certain segment, so it's possible that you can apply to the incubators that would be a better fit for your startup. Incubators typically offer you USD$20,000 for 5-10% of your company, and will require you work with them for 3 months at their facility.
From Forbes's Incubator Ranking:
| Rank | Incubator/ Accelerator |
City | Note |
|---|---|---|---|
| 1 | Y Combinator | Mountain View, Calif. | Dropbox and Airbnb are just the biggest names in portfolio. Investors fight to invest in YC companies at sky-high prices. Founded in 2005. |
| 2 | TechStars | Boulder, Boston, New York, Seattle, San Antonio | Founded in 2007, it has grown to five cities, but keeps batches small to give each startup extra attention. Has broader impact by helping other incubators. |
| 3 | DreamIt Ventures | Philadelphia, New York,Israel | Founded in 2008, it has programs in Philadelphia, New York and Israel, with 65 portfolio companies, including SCVNGR/Level Up. |
| 4 | AngelPad | San Francisco | Founded by seven ex-Googlers in 2010; hot portfolio, but too early to value many of the companies. |
| 5 | Launchpad LA | Los Angeles | Founded in 2009, 23 companies have gone through program, 19 have been funded, 5 acquired. |
| 6 | Excelerate Labs | Chicago | Founded in 2010, the firm has graduated 20 companies so far. Mentors include localGroupon investor Brad Keywell. |
| 7 | Kicklabs | San Francisco | Stage-agnostic accelerator focuses on helping startups close first deals with large brands and agencies. |
| 8 | 500 Startups | Mountain View, Calif. | Founded in 2010. Also has seed fund in addition to incubator. Focus on startups from overseas as well as US. |
| 9 | TechNexus | Chicago | Doesn’t have time limits on companies it accepts. Invests in its companies on case-by-case basis. Founded in 2007. |
| 10 | Tech Wildcatters | Dallas | New incubator, but has some promising startups |
| Others considered: The Brandery, Capital Factory, ERA Accelerator, LaunchBox Digital, NYC Seed Start |
Also, TechStars established a Global Accelerator Network (gan.co), which is a network of the best incubators that are not in Silicon Valley. They also have a lot of great incubators that you can consider as well.
A lot of these startups like YCombinator and 500Startups offer not only incubation (seed) money, but also traditional investments. A lot of the top incubators also offer you convertible debt (It's basically debt until the debt is converted into stocks. It converts when a milestone is hit, or if the investor chooses to convert).
Also, if you already have traction or revenue, there isn't any reason why you shouldn't continue to bootstrap (if money isn't a pressing issue). In fact, look at the article here, which mentions that 76% of the startups that were acquired in 2012, did not get VC funding. That's not to say that they did not get angel funding or seed funding. However, it's just some additional information for you to consider.
